BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2688| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 AB 2688 Page 2 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).) AB 2688 Page 3 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 AB 2688 Page 4 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. AB 2688 Page 5 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 AB 2688 Page 6 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 AB 2688 Page 7 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 AB 2688 Page 8 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 AB 2688 Page 9 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 **** END ****