Amended in Senate May 5, 2015

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 amended, 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 valuebegin insert and to minimize health disparitiesend insert 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
23insurers, 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 ofbegin delete enrollees.end delete
26begin insert enrollees, including recognizing the diversity of California and
27the impact of social determinants of health.end insert

P4    1

127671.  

(a) The Secretary of California Health and Human
2Services shall, no later than January 1, 2017, use a competitive
3process to contract with one or more independent, nonprofit
4organizations in order to administer the California Health Care
5Cost and Quality Database. This competitive process and any
6requests for proposal shall be publicly posted on the agency’s
7Internet Web site for a minimum of 30 days for public review and
8comment. A contract entered into pursuant to this section is exempt
9from Part 2 (commencing with Section 10100) of Division 2 of
10the Public Contract Code, and is exempt from review or approval
11by any division of the Department of General Services.

12(b) The secretary shall include as a term in the contract or
13contracts entered into pursuant to subdivision (a) all of the
14following:

15(1) A requirement that the nonprofit organization or
16organizations administering the California Health Care Cost and
17Quality Database do all of the following:

18(A) Establish, implement, and administer the California Health
19Care Cost and Quality Database in accordance with parameters
20developed pursuant to subdivision (a) of Section 127672.

21(B) Develop methodologies for the collection, validation,
22refinement, analysis, comparison, review, reporting, and
23improvement of health care data, including, but not limited to, data
24from fee-for-service, capitated, and other alternative, value-based,
25payment sources, submitted by health care entities that are
26validated, recognized as reliable, and meet industry and research
27 standards.

28(C) Receive information, as described in this section, from health
29care entities and report that information in a form that allows valid
30comparisons across care delivery systems.

begin insert

31(D) Ensure that the database has the capacity to map to other
32data sets, including public health data sets on morbidity and
33mortality, including data sets from the federal Centers for Disease
34Control, the State Department of Public Health, and other data
35sets with data regarding the social determinants of health.

end insert
begin delete

36(D)

end delete

37begin insert(end insertbegin insertE)end insert Comply with the requirements governing provider and
38supplier requests for error correction established pursuant to
39Section 401.717 of Title 42 of the Code of Federal Regulations
P5    1for all claims data received, including, but not limited to, data from
2sources other than Medicare.

3(2) A prohibition on the nonprofit organization or organizations
4administering the California Health Care Cost and Quality Database
5from doing either of the following:

6(A) Using the data received during the execution of the contract
7for any purpose not specified in this chapter or in the contract.

8(B) Receiving funding from any other source to accomplish the
9same purposes sought to be accomplished under this chapter unless
10funding is received from another nonprofit or government source
11and is for the purpose of research or education.

12(3) A requirement that the nonprofit organization or
13organizations administering the California Health Care Cost and
14Quality Database identify, in accordance with this section, the type
15of data, purpose of use, and entities and individuals that are
16required to report to, or that may have access to, the California
17Health Care Cost and Quality Database. An entity or individual
18shall not be required to report to, and shall not have access to, the
19California Health Care Cost and Quality Database until the review
20committee established pursuant to Section 127672 has approved
21the nonprofit organization or organizations determination.

22(c) (1) For the purpose of developing information for inclusion
23in the California Health Care Cost and Quality Database, a health
24care service plan, including a specialized health care service plan,
25an insurer licensed to provide health insurance, as defined in
26Section 106 of the Insurance Code, a self-insured employer, a
27supplier, as defined in paragraph (3) of subdivision (b) of Section
281367.50, or a provider, as defined in paragraph (2) of subdivision
29(b) of Section 1367.50, shall, and a multiemployer self-insured
30plan that is responsible for paying for health care services provided
31to beneficiaries and the trust administrator for a multiemployer
32self-insured plan may, providebegin delete bothend deletebegin insert allend insert of the following to the
33nonprofit organization or organizations administering the California
34Health Care Cost and Quality Database:

35(A) Utilization data from the health care service plans’ and
36insurers’ medical, dental, and pharmacy claims or, in the case of
37entities that do not use claims data, including, but not limited to,
38integrated delivery systems, encounter data consistent with the
39core set of data elements for data submission proposed by the
P6    1APCD Council, the University of New Hampshire, and the National
2Association of Health Data Organizations.

3(B) Pricing information for health care items, services, and
4medical and surgical episodes of care gathered from allowed
5charges for covered health care items and services or, in the case
6of entities that do not use or produce individual claims, price
7information that is the best possible proxy to pricing information
8for health care items, services, and medical and surgical episodes
9of care available in lieu of actual cost databegin delete soend delete to allow for
10meaningful comparisons of provider prices and treatment costs.

begin insert

11(C) Information sufficient to determine the impacts of social
12determinants of health, including age, gender, race, ethnicity,
13limited English proficiency, sexual orientation and gender identity,
14ZIP Code, and any other factors for which there is peer-reviewed
15evidence.

end insert

16(2) (A) The nonprofit organization or organizations
17administering the California Health Care Cost and Quality Database
18may report an entity’s failure to comply with paragraph (1) to the
19entity’s regulating agency.

20(B) The regulating agency of an entity described in paragraph
21(1) may enforce paragraph (1) using its existing enforcement
22procedures. Notwithstanding any other law, moneys collected
23pursuant to this authorization shall be subject to appropriation by
24the Legislature, and the failure to comply with paragraph (1) shall
25not be a crime.

26(d) (1) All uses and disclosures of data made pursuant to this
27section shall comply with all applicable state and federal laws for
28the protection of the privacy and security of data, including, but
29not limited to,begin insert the Confidentiality of Medical Information Act (Part
302.6 (commencing with Section 56)) of Division 1 of the Civil Code),
31the Information Practices Act (Chapter 1 (commencing with Section
321798) of Title 1.8 of Part 4 of Division 3 of the Civil Code, Title
331.81 (commencing with Section 1798.80) of Part 4 of Division 3
34of the Civil Code, andend insert
the federal Health Insurance Portability and
35Accountability Act of 1996 (Public Law 104-191) and the federal
36Health Information Technology for Economic and Clinical Health
37Act, Title XIII of the federal American Recovery and Reinvestment
38Act of 2009 (Public Law 111-5), and implementing regulations.

39(2) (A) All policies and protocols developed in the performance
40of the contract shall ensure that the privacy, security, and
P7    1confidentiality of individually identifiable health information is
2protected. The nonprofit organization or organizations
3administering the California Health Care Cost and Quality Database
4shall not publicly disclose any unaggregated, individually
5identifiable health information and shall develop a protocol for
6assessing the risk of reidentification stemming from public
7disclosure of any health information that is aggregated, individually
8identifiable health information.

9(B) For the purposes of this paragraph, “individually identifiable
10health information” has the same meaning as in Section 160.103
11of Title 45 of the Code of Federal Regulations.

12(3) Confidentially negotiated contract terms contained in a
13contract between a health care service plan or insurer and a provider
14or supplier shall be protected in any public disclosure of data made
15pursuant to this section. Individually identifiable proprietary
16contract information included in a contract between a health care
17service plan or insurer and a provider or supplier shall not be
18disclosed in an unaggregated format.

19(e) (1) The nonprofit organization or organizations
20administering the California Health Care Cost and Quality Database
21shall receive, process, maintain, and analyze information from
22data sources, including, but not limited to, data received pursuant
23to subdivision (c), claims from private and public payers, disease
24and chronic condition registries, third-party surveys of quality and
25patient satisfaction, reviews by licensing and accrediting bodies,
26and local and regional public health data. Aggregated payer and
27provider performance on validated measures of clinical quality
28and patient experience, such as measures from the Healthcare
29Effectiveness Data and Information Set (HEDIS) and Consumer
30Assessment of Healthcare Providers and Systems (CAHPS), shall
31be collected from accrediting organizations, including, but not
32limited to, the National Committee for Quality Assurance (NCQA),
33URAC, and the Joint Commission.

34(2) The nonprofit organization or organizations administering
35the California Health Care Cost and Quality Database shall include
36in an analysis performed pursuant to paragraph (1), but shall not
37be limitedbegin delete to,end deletebegin insert to including,end insert all of the following:

38(A) Population-level data on prevention, screening, and wellness
39utilization.

P8    1(B) Population-level data on behavioral and medical risk factors,
2interventions, and outcomes.

3(C) Population-level data on chronic conditions, management,
4and outcomes.

5(D) Population-level data on trends in utilization of procedures
6for treatment of similar conditions to evaluate medical
7appropriateness.

8(E) Facility and physician organization risk adjusted
9performancebegin delete informationend deletebegin insert measuresend insert on the quality, efficiency, and
10outcomes of care that are aligned with national efforts, including,
11but not limited to, those of the National Quality Forum, related to
12defining cost and quality measures.begin insert Measures shall be publicly
13reported without risk adjustment for sociodemographic factors
14and shall also be risk adjusted for sociodemographic factors if
15peer-reviewed literature indicates an association between health
16outcomes and a sociodemographic factor or factors.end insert

17(F) Data that permits consideration of socioeconomic status and
18disparities in care due to race, ethnicity, gender,begin insert limited English
19proficiency, ZIP Code,end insert
sexual orientation,begin delete andend delete genderbegin delete identity.end delete
20begin insert identity, end insertbegin insertand other factors for which there is peer-reviewed
21evidence of a relationship between a social determinant of health
22and health outcomes.end insert

23(f) No later than January 1, 2019, the nonprofit organization or
24organizations administering the California Health Care Cost and
25Quality Database shall make publicly available a web-based,
26searchable database. The database shall include the information
27and analysis described in subdivision (e). The information and
28analysis included in the database shall be presented in a way that
29facilitates comparisons of cost, quality, and satisfaction across
30payers, provider organizations, and other suppliers of health care
31services. This public database shall be regularly updated to reflect
32new data submissions.

33(g) Implementation and ongoing administration costs of the
34California Health Care Cost and Quality Database shall not be
35paid using General Fund moneys.

36

127672.  

(a) The Secretary of California Health and Human
37Services shall convene a review committee, composed of a broad
38spectrum of health care stakeholders and experts, including, but
39not limited to, representatives of the entities that are required to
40provide information pursuant to subdivision (c) of Section 127671
P9    1and representatives of purchasers, including, but not limited to,
2businesses, organized labor, and consumers, to develop the
3parameters for the establishment, implementation, and ongoing
4administration of the California Health Care Cost and Quality
5Database, including a business plan for sustainability without using
6moneys from the General Fund, and to approve the determinations
7described in paragraph (3) of subdivision (b) of Section 127671.
8The review committee shall hold public meetings with
9 stakeholders, solicit input, and set its own meeting agendas.
10Meetings of the review committee are subject to the Bagley-Keene
11Open Meeting Act (Article 9 (commencing with Section 11120)
12of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
13Code).

14(b) The secretary shall arrange for the preparation of an annual
15report to the Legislature and the Governor, to be submitted in
16compliance with Section 9795 of the Government Code, based on
17the findings of the review committee, including input from the
18public meetings, that shall, at a minimum, examine and address
19the following issues:

20(1) Assessing California health care needs and available
21resources.

22(2) Containing the cost of health care services and coverage.

23(3) Improving the quality and medical appropriateness of health
24care.

begin insert

25(4) Reducing health disparities and addressing the social
26determinants of health.

end insert
begin delete

27(4)

end delete

28begin insert(end insertbegin insert5)end insert Increasing the transparency of health care costs and the
29relative efficiency with which care is delivered.

begin delete

30(5)

end delete

31begin insert(end insertbegin insert6)end insert Use of disease management, wellness, prevention, and other
32innovative programs to keep people healthy and reduce disparities
33and costs and improving health outcomes for all populations.

begin delete

34(6)

end delete

35begin insert(end insertbegin insert7)end insert Efficient utilization of prescription drugs and technology.

begin delete

36(7)

end delete

37begin insert(end insertbegin insert8)end insert Reducing unnecessary, inappropriate, and wasteful health
38care.

begin delete

39(8)

end delete

40begin insert(end insertbegin insert9)end insert Educating consumers in the use of health care information.

begin delete

P10   1(9)

end delete

2begin insert(10)end insert Using existing data sources to build the California Health
3Care Cost and Quality Database.

4(c) The review committee established pursuant to this section
5shall not be convened until the Director of Finance has determined
6that sufficient private or federal funds have been received and that
7the funds have been appropriated for that purpose. The review
8committee shall continue to function for as long as the Department
9of Finance has determined that the California Health Care Cost
10and Quality Database is established and is being administered.

11(d) Notwithstanding any other law, the members of the review
12committee shall receive no per diem or travel expense
13reimbursement, or any other expense reimbursement.

14

SEC. 3.  

The Legislature finds and declares that Section 2 of
15this act, which adds Section 127671 to the Health and Safety Code,
16imposes a limitation on the public’s right of access to the meetings
17of public bodies or the writings of public officials and agencies
18within the meaning of Section 3 of Article I of the California
19Constitution. Pursuant to that constitutional provision, the
20Legislature makes the following findings to demonstrate the interest
21protected by this limitation and the need for protecting that interest:

22In order to protect confidential and proprietary information
23submitted to the California Health Care Cost and Quality Database,
24it is necessary for that information to remain confidential.



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