Senate BillNo. 26


Introduced by Senator Hernandez

December 1, 2014


An act to add Chapter 8 (commencing with Section 127670) to Part 2 of Division 107 of, and to repeal the heading of Chapter 8 (formerly commencing with Section 127670) of Part 2 of Division 107 of, the Health and Safety Code, relating to health care.

LEGISLATIVE COUNSEL’S DIGEST

SB 26, as introduced, Hernandez. California Health Care Cost and Quality Database.

Existing law establishes health care coverage programs to provide health care to segments of the population meeting specified criteria who are otherwise unable to afford health care coverage and provides for the licensure and regulation of health insurers and health care service plans.

This bill would state the intent of the Legislature to establish a system to provide valid, timely, and comprehensive health care performance information that is publicly available and can be used to improve the safety, appropriateness, and medical effectiveness of health care, and to provide care that is safe, medically effective, patient-centered, timely, affordable, and equitable. The bill would require the Secretary of California Health and Human Services to, no later than January 1, 2017, enter into a contract with one or more independent, nonprofit organizations to administer the California Health Care Cost and Quality Database. The bill would require the secretary to include specified terms in that contract or contracts, including, among others, that the nonprofit organization or organizations administering the California Health Care Cost and Quality Database develop methodologies relating to the submission of health care data by health care entities. The bill would require certain health care entities, including health care service plans, to provide specified information to the nonprofit organization or organizations administering the California Health Care Cost and Quality Database. The bill would authorize the nonprofit organization or organizations to report a health care entity that fails to comply with that requirement to the health care entity’s regulating agency, and would authorize the regulating agency to enforce that requirement using its existing enforcement procedures.

The bill would require all data disclosures made pursuant to these provisions to comply with all applicable state and federal laws for the protection of the privacy and security of data and would prohibit the public disclosure of any unaggregated, individually identifiable health information. The bill would require that certain confidentially negotiated contract terms be protected in data disclosures made pursuant to these provisions and would prohibit certain individually identifiable proprietary contract information from being disclosed in an unaggregated format. The bill would require the nonprofit organization or organizations administering the California Health Care Cost and Quality Database to receive, process, maintain, and analyze information from specified data sources, including, among others, disease and chronic condition registries. The bill would require, no later than January 1, 2019, the nonprofit organization or organizations administering the California Health Care Cost and Quality Database to publicly make available a web-based, searchable database and would require that database to be updated regularly. The bill would prohibit implementation and ongoing administration costs of the California Health Care Cost and Quality Database from being paid using General Fund moneys.

This bill would also require the secretary to convene a review committee composed of a broad spectrum of health care stakeholders and experts, as specified, to, among other things, develop the parameters for establishing, implementing, and administering the California Health Care Cost and Quality Database. The bill would require the secretary to arrange for the preparation of an annual report to the Legislature and the Governor that examines and addresses specified issues, including, among others, containing the cost of health care services and coverage. The bill would provide that the commission not be convened until the Director of Finance has determined that sufficient private or federal funds have been received and appropriated for that purpose, and that members of the committee not receive a per diem or travel expense reimbursement, or any other expense reimbursement.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

The heading of Chapter 8 (formerly commencing
2with Section 127670) of Part 2 of Division 107 of the Health and
3Safety Code
, as amended by Section 230 of Chapter 183 of the
4Statutes of 2004, is repealed.

5

SEC. 2.  

Chapter 8 (commencing with Section 127670) is added
6to Part 2 of Division 107 of the Health and Safety Code, to read:

7 

8Chapter  8. California Health Care Cost and Quality
9Database
10

 

11

127670.  

(a) It is the intent of the Legislature to establish a
12system to provide valid, timely, and comprehensive health care
13performance information that is publicly available and can be used
14to improve the safety, appropriateness, and medical effectiveness
15of health care, and to provide care that is patient-centered, timely,
16affordable, and equitable. It is also the intent of the Legislature to
17grant access to provider performance information to consumers
18and purchasers in order for them to understand the potential
19financial consequences and liabilities and obtain maximum quality
20and value in health care services.

21(b) It is the intent of the Legislature, by making cost and quality
22data available, to encourage health care service plans, health
23 insurers, and providers to develop innovative approaches, services,
24and programs that may have the potential to deliver health care
25that is both cost effective and responsive to the needs of enrollees.

26

127671.  

(a) The Secretary of California Health and Human
27Services shall, no later than January 1, 2017, use a competitive
28process to contract with one or more independent, nonprofit
29organizations in order to administer the California Health Care
P4    1Cost and Quality Database. This competitive process and any
2requests for proposal shall be publicly posted on the agency’s
3Internet Web site for a minimum of 30 days for public review and
4comment. A contract entered into pursuant to this section is exempt
5from Part 2 (commencing with Section 10100) of Division 2 of
6the Public Contract Code, and is exempt from review or approval
7by any division of the Department of General Services.

8(b) The secretary shall include as a term in the contract or
9contracts entered into pursuant to subdivision (a) all of the
10following:

11(1) A requirement that the nonprofit organization or
12organizations administering the California Health Care Cost and
13Quality Database do all of the following:

14(A) Establish, implement, and administer the California Health
15Care Cost and Quality Database in accordance with parameters
16developed pursuant to subdivision (a) of Section 127672.

17(B) Develop methodologies for the collection, validation,
18refinement, analysis, comparison, review, reporting, and
19improvement of health care data, including, but not limited to, data
20from fee-for-service, capitated, and other alternative, value-based,
21payment sources, submitted by health care entities that are
22validated, recognized as reliable, and meet industry and research
23 standards.

24(C) Receive information, as described in this section, from health
25care entities and report that information in a form that allows valid
26comparisons across care delivery systems.

27(D) Comply with the requirements governing provider and
28supplier requests for error correction established pursuant to
29Section 401.717 of Title 42 of the Code of Federal Regulations
30for all claims data received, including, but not limited to, data from
31sources other than Medicare.

32(2) A prohibition on the nonprofit organization or organizations
33administering the California Health Care Cost and Quality Database
34from doing either of the following:

35(A) Using the data received during the execution of the contract
36for any purpose not specified in this chapter or in the contract.

37(B) Receiving funding from any other source to accomplish the
38same purposes sought to be accomplished under this chapter unless
39funding is received from another nonprofit or government source
40and is for the purpose of research or education.

P5    1(3) A requirement that the nonprofit organization or
2organizations administering the California Health Care Cost and
3Quality Database identify, in accordance with this section, the type
4of data, purpose of use, and entities and individuals that are
5required to report to, or that may have access to, the California
6Health Care Cost and Quality Database. An entity or individual
7shall not be required to report to, and shall not have access to, the
8California Health Care Cost and Quality Database until the review
9committee established pursuant to Section 127672 has approved
10the nonprofit organization or organizations determination.

11(c) (1) For the purpose of developing information for inclusion
12in the California Health Care Cost and Quality Database, a health
13care service plan, including a specialized health care service plan,
14an insurer licensed to provide health insurance, as defined in
15Section 106 of the Insurance Code, a self-insured employer, a
16supplier, as defined in paragraph (3) of subdivision (b) of Section
171367.50, or a provider, as defined in paragraph (2) of subdivision
18(b) of Section 1367.50, shall, and a multiemployer self-insured
19plan that is responsible for paying for health care services provided
20to beneficiaries and the trust administrator for a multiemployer
21self-insured plan may, provide both of the following to the
22nonprofit organization or organizations administering the California
23Health Care Cost and Quality Database:

24(A) Utilization data from the health care service plans’ and
25insurers’ medical, dental, and pharmacy claims or, in the case of
26entities that do not use claims data, including, but not limited to,
27integrated delivery systems, encounter data consistent with the
28core set of data elements for data submission proposed by the
29APCD Council, the University of New Hampshire, and the National
30Association of Health Data Organizations.

31(B) Pricing information for health care items, services, and
32medical and surgical episodes of care gathered from allowed
33charges for covered health care items and services or, in the case
34of entities that do not use or produce individual claims, price
35information that is the best possible proxy to pricing information
36for health care items, services, and medical and surgical episodes
37of care available in lieu of actual cost data so to allow for
38meaningful comparisons of provider prices and treatment costs.

39(2) (A) The nonprofit organization or organizations
40administering the California Health Care Cost and Quality Database
P6    1may report an entity’s failure to comply with paragraph (1) to the
2entity’s regulating agency.

3(B) The regulating agency of an entity described in paragraph
4(1) may enforce paragraph (1) using its existing enforcement
5procedures. Notwithstanding any other law, moneys collected
6pursuant to this authorization shall be subject to appropriation by
7the Legislature, and the failure to comply with paragraph (1) shall
8not be a crime.

9(d) (1) All uses and disclosures of data made pursuant to this
10section shall comply with all applicable state and federal laws for
11the protection of the privacy and security of data, including, but
12not limited to, the federal Health Insurance Portability and
13Accountability Act of 1996 (Public Law 104-191) and the federal
14Health Information Technology for Economic and Clinical Health
15Act, Title XIII of the federal American Recovery and Reinvestment
16Act of 2009 (Public Law 111-5), and implementing regulations.

17(2) (A) All policies and protocols developed in the performance
18of the contract shall ensure that the privacy, security, and
19confidentiality of individually identifiable health information is
20protected. The nonprofit organization or organizations
21administering the California Health Care Cost and Quality Database
22shall not publicly disclose any unaggregated, individually
23identifiable health information and shall develop a protocol for
24assessing the risk of reidentification stemming from public
25disclosure of any health information that is aggregated, individually
26identifiable health information.

27(B) For the purposes of this paragraph, “individually identifiable
28health information” has the same meaning as in Section 160.103
29of Title 45 of the Code of Federal Regulations.

30(3) Confidentially negotiated contract terms contained in a
31contract between a health care service plan or insurer and a provider
32or supplier shall be protected in any public disclosure of data made
33pursuant to this section. Individually identifiable proprietary
34contract information included in a contract between a health care
35service plan or insurer and a provider or supplier shall not be
36disclosed in an unaggregated format.

37(e) (1) The nonprofit organization or organizations
38administering the California Health Care Cost and Quality Database
39shall receive, process, maintain, and analyze information from
40data sources, including, but not limited to, data received pursuant
P7    1to subdivision (c), claims from private and public payers, disease
2and chronic condition registries, third-party surveys of quality and
3patient satisfaction, reviews by licensing and accrediting bodies,
4and local and regional public health data. Aggregated payer and
5provider performance on validated measures of clinical quality
6and patient experience, such as measures from the Healthcare
7Effectiveness Data and Information Set (HEDIS) and Consumer
8Assessment of Healthcare Providers and Systems (CAHPS), shall
9be collected from accrediting organizations, including, but not
10limited to, the National Committee for Quality Assurance (NCQA),
11URAC, and the Joint Commission.

12(2) The nonprofit organization or organizations administering
13the California Health Care Cost and Quality Database shall include
14in an analysis performed pursuant to paragraph (1), but shall not
15be limited to, all of the following:

16(A) Population-level data on prevention, screening, and wellness
17utilization.

18(B) Population-level data on behavioral and medical risk factors,
19interventions, and outcomes.

20(C) Population-level data on chronic conditions, management,
21and outcomes.

22(D) Population-level data on trends in utilization of procedures
23for treatment of similar conditions to evaluate medical
24appropriateness.

25(E) Facility and physician organization risk adjusted
26performance information on the quality, efficiency, and outcomes
27 of care that are aligned with national efforts, including, but not
28limited to, those of the National Quality Forum, related to defining
29cost and quality measures.

30(F) Data that permits consideration of socioeconomic status and
31disparities in care due to race, ethnicity, gender, sexual orientation,
32and gender identity.

33(f) No later than January 1, 2019, the nonprofit organization or
34organizations administering the California Health Care Cost and
35Quality Database shall make publicly available a web-based,
36searchable database. The database shall include the information
37and analysis described in subdivision (e). The information and
38analysis included in the database shall be presented in a way that
39facilitates comparisons of cost, quality, and satisfaction across
40payers, provider organizations, and other suppliers of health care
P8    1services. This public database shall be regularly updated to reflect
2new data submissions.

3(g) Implementation and ongoing administration costs of the
4California Health Care Cost and Quality Database shall not be
5paid using General Fund moneys.

6

127672.  

(a) The Secretary of California Health and Human
7Services shall convene a review committee, composed of a broad
8spectrum of health care stakeholders and experts, including, but
9not limited to, representatives of the entities that are required to
10provide information pursuant to subdivision (c) of Section 127671
11and representatives of purchasers, including, but not limited to,
12businesses, organized labor, and consumers, to develop the
13parameters for the establishment, implementation, and ongoing
14administration of the California Health Care Cost and Quality
15Database, including a business plan for sustainability without using
16moneys from the General Fund, and to approve the determinations
17described in paragraph (3) of subdivision (b) of Section 127671.
18The review committee shall hold public meetings with
19 stakeholders, solicit input, and set its own meeting agendas.
20Meetings of the review committee are subject to the Bagley-Keene
21Open Meeting Act (Article 9 (commencing with Section 11120)
22of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
23Code).

24(b) The secretary shall arrange for the preparation of an annual
25report to the Legislature and the Governor, to be submitted in
26compliance with Section 9795 of the Government Code, based on
27the findings of the review committee, including input from the
28public meetings, that shall, at a minimum, examine and address
29the following issues:

30(1) Assessing California health care needs and available
31resources.

32(2) Containing the cost of health care services and coverage.

33(3) Improving the quality and medical appropriateness of health
34care.

35(4) Increasing the transparency of health care costs and the
36relative efficiency with which care is delivered.

37(5) Use of disease management, wellness, prevention, and other
38innovative programs to keep people healthy and reduce disparities
39and costs and improving health outcomes for all populations.

40(6) Efficient utilization of prescription drugs and technology.

P9    1(7) Reducing unnecessary, inappropriate, and wasteful health
2care.

3(8) Educating consumers in the use of health care information.

4(9) Using existing data sources to build the California Health
5Care Cost and Quality Database.

6(c) The review committee established pursuant to this section
7shall not be convened until the Director of Finance has determined
8that sufficient private or federal funds have been received and that
9the funds have been appropriated for that purpose. The review
10committee shall continue to function for as long as the Department
11of Finance has determined that the California Health Care Cost
12and Quality Database is established and is being administered.

13(d) Notwithstanding any other law, the members of the review
14committee shall receive no per diem or travel expense
15reimbursement, or any other expense reimbursement.

16

SEC. 3.  

The Legislature finds and declares that Section 2 of
17this act, which adds Section 127671 to the Health and Safety Code,
18imposes a limitation on the public’s right of access to the meetings
19of public bodies or the writings of public officials and agencies
20within the meaning of Section 3 of Article I of the California
21Constitution. Pursuant to that constitutional provision, the
22Legislature makes the following findings to demonstrate the interest
23protected by this limitation and the need for protecting that interest:

24In order to protect confidential and proprietary information
25submitted to the California Health Care Cost and Quality Database,
26it is necessary for that information to remain confidential.



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