BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 2688|
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                                   THIRD READING 


          Bill No:  AB 2688
          Author:   Gordon (D) 
          Amended:  8/19/16 in Senate
          Vote:     21 

           SENATE JUDICIARY COMMITTEE:  5-2, 6/28/16
           AYES:  Jackson, Hertzberg, Leno, Monning, Wieckowski
           NOES:  Moorlach, Anderson

           ASSEMBLY FLOOR:  54-14, 5/12/16 - See last page for vote

           SUBJECT:   Privacy:  commercial health monitoring programs


          SOURCE:    Author


          DIGEST:  This bill prohibits the operator of a commercial health  
          monitoring program, such as a wearable fitness device connected  
          to the Internet, from sharing or using a consumer's health  
          monitoring information without explicit authorization, and  
          prohibits employers from using health monitoring information  
          collected through a commercial health monitoring program from  
          discriminating against employees.  


          Senate Floor Amendments of 8/19/16 make various changes  
          throughout the bill.  Specifically, the amendments (1) define  
          "service provider" and prohibit a service provider from using or  
          further disclosing a consumer's information; (2) prohibit a  
          third party from further disclosing a consumer's information;  
          (3) allow a consumer to access or delete his or her information,  
          as specified; and (4) require an operator of a commercial health  
          monitoring program to make available and provide notice of a  
          process whereby a consumer may withdraw consent to share his or  








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          her information, as specified. 


          ANALYSIS:  


          Existing law: 


           1) Provides that all people have inalienable rights, including  
             the right to pursue and obtain privacy.  (Cal. Const. art. I,  
             Sec. 1.)


           2) Specifies, pursuant to the Health Insurance Portability and  
             Accountability Act, privacy protections for patients'  
             protected health information and generally provides that a  
             covered entity, as defined (health plan, health care  
             provider, and health care clearing house), may not use or  
             disclose protected health information except as specified or  
             as authorized by the patient in writing.  (45 C.F.R. Sec.  
             164.500 et seq.)  


           3) Prohibits, under the State Confidentiality of Medical  
             Information Act (CMIA), 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.  (Civ. Code  
             Sec. 56 et seq.) 


           4) Defines "medical information" to mean any individually  
             identifiable information, in electronic or physical form, in  
             possession of or derived from a provider of health care,  
             health care service plan, pharmaceutical company, or  
             contractor regarding a patient's medical history, mental or  
             physical condition, or treatment, and defines "individually  
             identifiable" to mean that the medical information includes  
             or contains any element of personal identifying information  
             sufficient to allow identification of the individual, as  
             specified.  (Civ. Code Sec. 56.05(g).)








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           5) Provides that any business organized for the purpose of  
             maintaining medical information in order to make the  
             information available to an individual or to a provider of  
             health care at the request of the individual or the provider  
             of health care, for purposes of allowing the individual to  
             manage his or her information, or for the diagnosis of  
             treatment of the individual, shall be deemed to be a provider  
             of health care subject to the requirements of the CMIA.   
             (Civ. Code Sec. 56.06(a).) 


           6) Provides that any provider of health care, health care  
             service plan, pharmaceutical company, or contractor who  
             negligently creates, maintains, preserves, stores, abandons,  
             destroys, or disposes of written or electronic medical  
             records shall be subject to damages in a civil action or an  
             administrative fine, as specified.  (Civ. Code Sec. 56.36.)


          This bill:


           1) Defines "commercial health monitoring program" to mean a  
             commercial Internet Web site, online service, or product used  
             by consumers whose primary purpose is to collect the  
             consumer's individually identifiable health monitoring  
             information.

           2) Defines "health monitoring information" to mean any  
             information, in electronic or physical form, about a  
             consumer's mental or physical condition that is collected by  
             a commercial health monitoring program through a direct  
             measurement of a consumer's mental or physical condition or  
             though user-input regarding a consumer's mental or physical  
             condition into a commercial health monitoring program.

           3) Defines "individually identifiable" to mean information that  
             includes or contains an element of personal identifying  
             information sufficient to allow identification of the  
             consumer, including the consumer's name, address, electronic  








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             mail address, telephone number, social security number, or  
             unique electronic identifier, or other information that,  
             alone or in combination with other publicly available  
             information, reveals the consumer's identity.

           4) Defines "third party" to mean an entity with whom the  
             consumer does not have a direct relationship, as specified,  
             and whose processing of individually identifiable health  
             monitoring information is not otherwise necessary for the  
             functionality of the commercial health monitoring program. 
           
            5) Defines "service provider" means an entity which does not  
             further use or disclose individually identifiable health  
             information except at the direction of the commercial health  
             monitoring program to other service providers of the  
             commercial health monitoring program and either:

                   provides services to the operator that support the  
                functionality or operation of the commercial health  
                monitoring program.
                   controls, or is under common control with the provider  
                of the commercial health monitoring program, as specified.  


           1) Prohibits an operator of a commercial health monitoring  
             program from disclosing individually identifiable health  
             monitoring information without first obtaining consent from  
             the consumer, as specified. 

           2) Provides that the consent shall be separate from all other  
             authorizations or agreements, and include the name or nature  
             of the third party and purpose for the request.

           3) Provides that a consumer's refusal to consent shall not  
             limit the consumer's ability to use the commercial health  
             monitoring program, as specified. 

           4) Requires that the operator of a commercial health monitoring  
             program make available and provide notice of a process  
             whereby a consumer may withdraw his or her consent to share  
             information with a third party, as specified. 









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           5) Requires that, upon request by the consumer, that the  
             commercial health monitoring program delete or provide to the  
             consumer his or her information, as specified. 

           6) Requires that an  operator of a commercial health monitoring  
             program that creates, maintains, preserves, stores, abandons,  
             destroys, deletes, or disposes of health monitoring  
             information shall do so in a manner to preserve the security  
             and confidentiality of the information.

           7) Authorizes the disclosure of individually identifiable  
             health monitoring information to a healthcare provider or  
             government official in specified circumstances without first  
             obtaining the consent of the consumer. 

           8) Requires that an employer who receives health monitoring  
             information do the following: 

                   establish appropriate procedures to preserve the  
                security and confidentiality of information, as specified;
                   not discriminate against an employee in any terms or  
                conditions of employment due to that employee's refusal to  
                provide a consent; and
                   not use, disclose, or knowingly permit its employees  
                or agents to use, sell, or disclose individually  
                identifiable health monitoring information which the  
                employer possesses pertaining to its employees without  
                first obtaining that employee's consent to do so.

           1) Provides that no employer that has complied with the  
             provision of the bill shall be liable for any unauthorized  
             use or disclosure of individually identifiable health  
             monitoring information.

           2) Prohibits an entity which is not a commercial health  
             monitoring program from further disclosing that health  
             monitoring information, and assigns responsibility for a  
             violation to the disclosing entity.


          Background









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          In July 2013, the Privacy Rights Clearinghouse released a report  
          entitled "Mobile Health and Fitness Applications and Information  
          Privacy." The report examined a total of 43 free and paid mobile  
          phone applications (apps) on more than 150 separate data points  
          related to privacy and security.  


          The report stated "our research brought us to the conclusion  
          that, from a privacy perspective, mobile health and fitness  
          applications are not particularly safe when it comes to  
          protecting users' privacy.  Consumers who have no hesitation  
          about sharing personal information will probably find value in  
          sharing the details of their pregnancies by linking their app  
          with Facebook, participating in app-based chat groups and  
          posting photographs of themselves as their pregnancies progress.  
           Others will find that socializing their diet or exercise  
          regimes provides support or competition that helps motivate  
          them."  The report also found that, as of 2013, 39 percent of  
          free apps and 30 percent of paid apps sent data to someone not  
          disclosed by the developer either in the app or any privacy  
          policy.  Additionally, only 13 percent of free apps and 10  
          percent of paid apps used encryption for all data connections  
          and transmissions. 


          More recently, another study excerpted in the Journal of the  
          American Medical Association (JAMA) (March 8, 2016) did an  
          analysis of privacy practices of diabetes management  
          applications on Android smartphones and found widespread  
          problems.  The study examined 211 separate apps and found that  
          81 percent lacked privacy policies, and among those that did, 49  
          percent included permissions to share data with partners and  
          third parties and 39 percent authorized use of data for  
          advertising purposes.  

          The JAMA report noted, "this study demonstrated that diabetes  
          apps shared information with third parties, posing privacy risks  
          because there are no federal legal protections against the sale  
          or disclosure of data from medical apps to third parties.  The  
          sharing of sensitive health information by apps is generally not  
          prohibited by the Health Insurance Portability and  








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          Accountability Act.  Patients might mistakenly believe that  
          health information entered into an app is private (particularly  
          if the app has a privacy policy), but that generally is not the  
          case.  Medical professionals should consider privacy  
          implications prior to encouraging patients to use health apps."

          Partially in response, the Legislature passed AB 658 (Calderon,  
          Chapter 296, Statutes of 2013), which applied the prohibitions  
          of the CMIA to any business that offers software or hardware to  
          consumers, including a mobile application or other related  
          device that is designed to maintain medical information to allow  
          an individual to manage his or her information, or for the  
          diagnosis, treatment, or management of a medical condition of  
          the individual.  This bill, seeking to protect the personal  
          health information of individuals and employees collects on  
          mobile applications, regulates how employers, operators, and  
          third parties use that information. 


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:NoLocal:    No


          SUPPORT:   (Verified8/19/16)


          None received


          OPPOSITION:   (Verified8/31/16)


          American Civil Liberties Union of California
          California Alliance for Retired Americans
          California Chamber of Commerce
          California Public Interest Research Group
          Cellular Telephone Industries Association 
          Civil Justice Association of California
          CompTia
          Consumer Action
          Consumer Federation of California
          Consumer Watchdog 








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          Direct Marketing Association
          Entertainment Software Association
          Internet Association
          TechNet
          Western States Council


          ARGUMENTS IN SUPPORT:  The author writes, "sensitive  
          health-related data from commercially obtained wearable health  
          monitoring devices or online applications are not currently  
          protected by any state or federal law. There are no restrictions  
          on how companies may use, share or sell this information, even  
          in personally identifiable form. [?] Currently, wearable devices  
          can perform substantial monitoring, including everything from  
          heart rate to brain wave patterns. Simple measurements such as  
          walking pattern can indicate injury or disability and  
          measurement of body temperature can reveal ovulation cycles.  
          While this information is valuable and empowering to the  
          consumer, lack of a common agreement on how this information can  
          be shared leaves the consumer without adequate protections.    

          ARGUMENTS IN OPPOSITION: A number of privacy groups oppose this  
          bill unless amended to provide stronger consumer protections.   
          The Consumer Federation of California, in opposition, argues  
          that without precise language spelling out privacy rights,  
          commercial profit motives will always prevail over consumer  
          privacy rights.   Consumer Federation writes:

            Our experience over the years with enforcement of privacy laws  
            has shown us that without precise language, such as clearly  
            spelling out the steps required for obtaining information  
            sharing permission, along with strong sanctions for privacy  
            violations, commercial profit motives will always prevail over  
            consumer privacy rights. In recent years, state courts have  
            whittled away at the privacy provisions of the Song Beverly  
            Credit Card Act and the Confidentiality of Medical Information  
            Act. These courts interpreted words contained in these laws as  
            narrowly as possible, siding with business interests, and  
            inferring meanings that were at odds with the intent and  
            legislative histories of these laws.

            This hard-learned experience informs our objections to the  








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            bill. AB 2688 does not safeguard the privacy of individually  
            identifiable health records.

          A coalition of technology companies also oppose the bill unless  
          amended to address "unintended consequences, logistical  
          difficulties, and consumer harm."  
          
          ASSEMBLY FLOOR:  54-14, 5/12/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Bloom,  
            Bonilla, Bonta, Brown, Calderon, Campos, Chang, Chau, Chiu,  
            Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Hadley, Roger Hernández, Holden, Irwin, Jones, Levine,  
            Linder, Lopez, Low, McCarty, Medina, Mullin, Nazarian,  
            O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon
          NOES:  Baker, Chávez, Dahle, Beth Gaines, Gray, Grove, Harper,  
            Lackey, Maienschein, Mayes, Olsen, Patterson, Wagner, Wilk
          NO VOTE RECORDED:  Bigelow, Brough, Burke, Frazier, Gallagher,  
            Jones-Sawyer, Kim, Mathis, Melendez, Obernolte, Steinorth,  
            Waldron

          Prepared by:Nichole Rapier / JUD. / (916) 651-4113
          8/31/16 11:49:53


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