BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 26
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|AUTHOR: |Hernandez |
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|VERSION: |December 1, 2014 |
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|HEARING DATE: |April 22, 2015 | | |
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|CONSULTANT: |Melanie Moreno |
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SUBJECT : California Health Care Cost and Quality Database
SUMMARY : Requires the Secretary of California Health and Human Services
Agency to, no later than January 1, 2017, use a competitive
process to contract, as specified, with one or more independent,
nonprofit organizations in order to administer the California
Health Care Cost and Quality Database. Requires the nonprofit
organization, no later than January 1, 2019, to make a publicly
available, web-based, searchable database, as specified.
Requires the information and analysis included in the database
to be presented in a way that facilitates comparisons of cost,
quality, and patient satisfaction across payers, provider
organizations, and other suppliers of health care services.
Existing law:
1.Establishes the Office of Statewide Health Planning and
Development (OSHPD) as the single state agency responsible for
collecting specified health facility and clinic data for use
by all agencies. Requires hospitals to make and file with
OSHPD certain specified reports, including a Hospital
Discharge Abstract Data Record with data elements for each
admission, such as diagnoses and disposition of the patient.
2.Requires OSHPD, to publish annually risk-adjusted outcome
reports on medical, surgical and obstetric conditions or
procedures, and others selected by OSHPD in accordance with
specified criteria.
3.Requires OSHPD, to publish a risk-adjusted outcome report for
coronary artery bypass graft (CABG) surgery for all CABG
surgeries performed in the state. Requires the reports to
compare risk-adjusted outcomes by hospital in every year, and
by cardiac surgeon in every other year, but permits
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information on individual hospitals and surgeons to be
excluded from the reports based upon the recommendation of a
clinical panel for statistical and technical considerations.
4.Requires a hospital to make a written or electronic copy of
its charge description master available at the hospital
location. Requires the hospital to post a notice that the
hospital's charge description master is available, and
requires any information about charges provided to include
information about where to obtain information regarding
hospital quality, including hospital outcome studies available
from OSHPD and hospital survey information available from the
Joint Commission for Accreditation of Healthcare
Organizations.
5.Establishes the Department of Managed Health Care (DMHC) to
regulate health plans and the California Department of
Insurance (CDI) to regulate health insurers. Requires
specified health plans and insurers to submit reports to state
and federal regulators on medical loss ratios, rate filings,
enrollment data, as specified.
6.Prohibits contracts between carriers and a licensed hospital
or health care facility owned by a licensed hospital from
containing any provision that restricts the ability of the
carrier from furnishing information to enrollees or insureds
concerning the cost range of procedures or the quality of
services. Provides hospitals at least 20 days in advance to
review the methodology and data, requires risk adjustment
factors for quality data, and requires an opportunity for a
hospital to provide a link on the carrier's Website where the
hospital's response to the data can be accessed.
7.Makes, under federal law, Medicare data available for the
evaluation of the performance of providers of services and
suppliers, to qualified entities, defined as a public or
private entity that is qualified as determined by the
Secretary of the federal Department of Health and Human
Services (HHS), to use to evaluate the performance of
providers of services and suppliers on measures of quality,
efficiency, effectiveness, and resource use, and applies other
requirements to qualified entities as the HHS Secretary may
specify, such as ensuring security of data.
8.Prohibits a health plan from releasing any information to an
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employer that would directly or indirectly indicate to the
employer that an employee is receiving or has received
services from a health care provider covered by the plan
unless authorized to do so by the employee.
9.Establishes Covered California as a state-based health care
benefit exchange in state government to make available
selectively contracted qualified health plans (QHPs) for
individual and small group purchasers. Requires QHPs to
submit data to Covered California.
10.Establishes, under federal law, the Health Insurance
Portability and Accountability Act of 1996 (HIPAA), which
among various provisions, mandates industry-wide standards for
health care information on electronic billing and other
processes; and, requires the protection and confidential
handling of protected health information.
11.Establishes the Confidentiality of Medical Information Act,
which prohibits providers of healthcare, health care service
plans, their contractors, and any business organized for the
purpose of maintaining medical information, from using medical
information for any purpose other than providing health care
services, except as expressly authorized by the patient or as
otherwise required or authorized by law.
This bill:
1.Creates the California Health Care Cost and Quality Database
(database) and requires the Secretary of California Health and
Human Services Agency (CHHS) to, no later than January 1,
2017, use a competitive process to contract, as specified,
with one or more independent, nonprofit organizations in order
to administer it. Requires the competitive process and any
requests for proposal to be publicly posted on CHHS' Web site
for a minimum of 30 days for public review and comment.
2.Requires CHHS to include, as terms in the contract or
contracts:
a. A requirement that the nonprofit organization
administering the database establish it with
parameters as specified in 13) below; develop
methodologies for the collection, validation,
refinement, analysis, comparison, review, reporting,
and improvement of health care data, as specified;
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receive information from health care entities and
report that information in a form that allows valid
comparisons across care delivery systems, as
specified; and, comply with the requirements governing
provider and supplier requests for error correction
established pursuant specified federal regulations.
b. A prohibition on the nonprofit from using data
received for any purpose not specified in this bill or
in the contract, or receiving funding from any other
source to accomplish the same purposes sought under
this bill unless that funding is received from another
nonprofit or government source and is for the purpose
of research or education.
c. A requirement that the nonprofit identify the
type of data, purpose of use, and entities and
individuals that are required to report to, or that
may have access to, the database. Prohibits an entity
or individual from being required to report to, and
from having access to, the database until the review
committee established under 13) below has approved the
nonprofit determination.
3.Requires, for the purpose of developing information for
inclusion in the database, health plans, insurers,
self-insured employers, and suppliers and providers, as
defined, to provide the nonprofit organization:
a. Utilization data from medical, dental, and
pharmacy claims. In the case of entities that do not
use claims data (including, but not limited to,
integrated delivery systems), encounter data
consistent with the core set of data elements for data
submission proposed by the APCD Council, the
University of New Hampshire, and the National
Association of Health Data Organizations; and,
b. Pricing information for health care items,
services, and medical and surgical episodes of care
gathered from allowed charges for covered health care
items and services. In the case of entities that do
not use or produce individual claims, price
information that is the best possible proxy to pricing
information for health care items, services, and
medical and surgical episodes of care available in
lieu of actual cost data to allow for meaningful
comparisons of provider prices and treatment costs.
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4.Permits a multiemployer self-insured plan that is responsible
for paying for health care services provided to beneficiaries
and the trust administrator for a multiemployer self-insured
plan to provide the information in 3) above.
5.Permits the nonprofit organization to report an entity's
failure to comply with 3) above to the entity's regulating
agency. Permits the regulating agency to enforce the
requirement in 3) above using its existing enforcement
procedures. Requires moneys collected pursuant to the
authorization to enforce to be subject to appropriation by the
Legislature. Specifies that the failure to comply with 3)
above is not a crime.
6.Requires all uses and disclosures of data made pursuant to
this bill to comply with all applicable state and federal laws
for the protection of the privacy and security of data,
including, but not limited to, HIPAA and the federal Health
Information Technology for Economic and Clinical Health Act
and implementing regulations.
7.Requires all policies and protocols developed in the
performance of the contract to ensure that the privacy,
security, and confidentiality of individually identifiable
health information is protected. Prohibits the nonprofit
organization from publicly disclosing any unaggregated,
individually identifiable health information, as defined, and
requires the nonprofit to develop a protocol for assessing the
risk of reidentification stemming from public disclosure of
any health information that is aggregated, individually
identifiable health information.
8.Requires confidentially negotiated contract terms contained in
a contract between a health plan or insurer and a provider or
supplier to be protected in any public disclosure of data made
pursuant to this bill. Prohibits individually identifiable
proprietary contract information included in a contract
between a health plan or insurer and a provider or supplier
from being disclosed in an unaggregated format.
9.Requires the nonprofit organization to receive, process,
maintain, and analyze information from data sources,
including, but not limited to, data received pursuant to
subdivision #3 above, claims from private and public payers,
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disease and chronic condition registries, third-party surveys
of quality and patient satisfaction, reviews by licensing and
accrediting bodies, and local and regional public health data.
Requires aggregated payer and provider performance on
validated measures of clinical quality and patient experience,
such as measures from the Healthcare Effectiveness Data and
Information Set (HEDIS) and Consumer Assessment of Healthcare
Providers and Systems (CAHPS), to be collected from
accrediting organizations, including, but not limited to, the
National Committee for Quality Assurance (NCQA), URAC, and the
Joint Commission.
10.Requires the nonprofit organization to include in an
analysis, performed pursuant to 9) above, to include all of
the following:
a. Population-level data on prevention,
screening, and wellness utilization;
b. Population-level data on behavioral and
medical risk factors, interventions, and outcomes;
c. Population-level data on chronic conditions,
management, and outcomes;
d. Population-level data on trends in utilization
of procedures for treatment of similar conditions to
evaluate medical appropriateness;
e. Facility and physician organization risk
adjusted performance information on the quality,
efficiency, and outcomes of care that are aligned with
national efforts, including, but not limited to, those
of the National Quality Forum, related to defining
cost and quality measures; and,
f. Data that permits consideration of
socioeconomic status and disparities in care due to
race, ethnicity, gender, sexual orientation, and
gender identity.
11.Requires the nonprofit organization, no later than January 1,
2019, to make publicly available a web-based, searchable
database, as specified. Requires the information and analysis
included in the database to be presented in a way that
facilitates comparisons of cost, quality, and satisfaction
across payers, provider organizations, and other suppliers of
health care services. Requires the database to be regularly
updated to reflect new data submissions.
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12.Prohibits the implementation and ongoing administration costs
of the database from being paid using General Fund (GF)
moneys.
13.Requires CHHS to convene a review committee, composed of a
broad spectrum of health care stakeholders and experts,
including, but not limited to, representatives of the entities
that are required to provide information pursuant to 3) above
and representatives of purchasers, including, but not limited
to, businesses, organized labor, and consumers, to develop the
parameters for the establishment, implementation, and ongoing
administration of the database, including a business plan for
sustainability without using GF moneys, as specified. Requires
the review committee to hold public meetings with
stakeholders, solicit input, and set its own meeting agendas.
Makes review committee meetings subject to the Bagley-Keene
Open Meeting Act.
14.Requires CHHS to arrange for the preparation of an annual
report to the Legislature and the Governor, as specified,
based on the findings of the review committee, including input
from the public meetings, that shall, at a minimum, examine
and address the following issues:
a. Assessing California health care needs and
available resources;
b. Containing the cost of health care services
and coverage;
c. Improving the quality and medical
appropriateness of health care;
d. Increasing the transparency of health care
costs and the relative efficiency with which care is
delivered;
e. Use of disease management, wellness,
prevention, and other innovative programs to keep
people healthy and reduce disparities and costs and
improving health outcomes for all populations;
f. Efficient utilization of prescription drugs
and technology;
g. Reducing unnecessary, inappropriate, and
wasteful health care;
h. Educating consumers in the use of health care
information; and,
i. Using existing data sources to build the
database.
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15.Prohibits the review committee from being convened until the
Director of Finance (DOF) has determined that sufficient
private or federal funds have been received and that the funds
have been appropriated for that purpose. Requires the review
committee to continue to function for as long as DOF has
determined that the database is established and is being
administered.
16.Prohibits the members of the review committee from receiving
per diem or travel expense reimbursement, or any other expense
reimbursement.
FISCAL
EFFECT : This bill has not been analyzed by a fiscal committee.
COMMENTS :
1.Author's statement. According to the author, beginning in
March 2014, the Senate Committee on Health convened several
health care experts to discuss factors that contribute to the
growing cost of health care in California and efforts to make
care more affordable. At a second hearing in February of this
year, the Committee heard testimony related to some major cost
drivers in the health care system, including pharmaceuticals,
hospital costs, and the effects of geographic location on
contracting. The third, held in March of this year, served to
educate members and the public about the effect of health care
costs on consumers. This series of hearings examined policy
solutions to control health care costs as millions of
Californians obtain coverage under the federal Patient
Protection and Affordable Care Act (ACA). Testimony presented
at the hearings illustrated the complexity of the health care
market and the array of approaches to containing costs. In
addition to expanded coverage, the author believes that, like
past health care reform efforts, a long-term, comprehensive
action agenda for California policymakers is necessary to
ensure that health care costs are appropriate and health care
premiums are affordable, especially given that the ACA
contains a mandate for individuals to purchase coverage. The
author states this bill is intended to help make available
valid performance information to promote care that is safe,
medically effective, patient-centered, timely, efficient,
affordable and equitable. This bill seeks to put provider
cost and performance information into the hands of consumers
and purchasers so that they are able to understand their
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financial liability and realize the best quality and value
available to them.
2.All-Payer Claims Databases. According to the National
Conference of State Legislatures, several states have
established databases that collect health insurance claims
information from all health care payers into a statewide
information repository, referred to as "all-payer claims
databases." An all-payer claims database is designed to
inform cost containment and quality improvement efforts.
Payers include private health insurers, Medicaid, children's
health insurance and state employee health benefit programs,
prescription drug plans, dental insurers, self-insured
employer plans and Medicare. The databases contain eligibility
and claims data (medical, pharmacy and dental) and are used to
report cost, use and quality information. The data consist of
"service-level" information based on valid claims processed by
health payers. Service-level information includes charges and
payments, the provider(s) receiving payment, clinical
diagnosis and procedure codes, and patient demographics. To
mask the identity of patients and ensure privacy, states
usually encrypt, aggregate and suppress patient identifiers.
Colorado, Kansas, Minnesota, Tennessee, Maine, Maryland,
Massachusetts, New Hampshire, Utah and Vermont all have APCDs.
Most of these states have chosen to house their APCDs at a
state agency (either an existing agency or a newly created
entity); one state (Colorado) has its APCD run by a nonprofit
organization. The papers emphasize the importance of engaging
key stakeholders early and often, including payers, health
care providers, employers, state agencies, and consumers. The
papers note that for most states, legislation creating an APCD
usually articulates broad reporting goals which are further
refined in rules or regulations for data collection or data
use.
3.Existing California initiatives. In California, the California
Healthcare Performance Information System (CHPI) is a
voluntary physician performance database with statistical
analysis that will eventually publish information online.
According to the CHPI website, starting in 2015, output will
be an analysis of claims data aggregated from more than 12
million patients enrolled in CHPI's three participating
California health plans- Blue Shield, Anthem Blue Cross and
United Healthcare, as well as Medicare. CHPI was federally
certified to include data from Medicare's five million
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California beneficiaries, and became the first Qualified
Entity to receive Medicare data.
The University of California, San Francisco is working with
the California Department of Insurance (CDI) on a medical cost
and quality transparency website. According to CDI, the
website will report average prices paid for episodes of care
or annual costs for chronic conditions, as well as quality
measures where available. Prices will be aggregated across
payers and providers, and shown at the regional level based on
the 19 California rating regions (some regions may need to be
consolidated pursuant to the terms of the data license
agreement). The website is expected to provide price
information for 95 to 99 episodes of care or conditions. Five
to 15 of those episodes or conditions will have both price and
quality information as well as consumer education content
created by Consumers Union. Quality information will consist
of existing performance, appropriateness, and outcome
measures.
4.Double referral. This bill has been double referred. Should
it pass out of this Committee, it will be referred to the
Senate Judiciary Committee.
5.Related legislation. SB 275 (Hernandez), requires OSHPD to
adopt a regulation that adds physician identifiers to the
patient level data elements that are required to be collected
and reported by hospitals and surgical clinics. SB 275 passed
out of the Senate Health Committee by a vote of 7-0.
SB 546 (Leno), establishes a rate approval process for large
group health insurance products prior to the implementation of
any rate change that equals or exceeds certain triggers, or at
the request of a large group purchaser. Establishes a rate
review process of a health plan's or insurer's entire
aggregated large group market products and requires DMHC and
CDI to conduct a public meeting regarding large group rate
changes for each plan or insurer that offers coverage in the
large group market on or before November 1, 2016 and annually
thereafter. SB 546 is set to be heard in this Committee on
April 22, 2015.
6.Prior legislation. SB 1322 (Hernandez), of 2014, was
substantially similar to this bill. SB 1322 was held on the
Assembly Appropriations Committee suspense file.
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SB 1182 (Leno) Chapter 577, Statutes of 2014, requires health
plans and insurers to share specified data with purchasers
that have 1,000 or more enrollees or that are multiemployer
trusts.
SB 1340 (Hernandez), Chapter 83, Statutes of 2014, expands
provisions related to gag clauses in contracts between health
plans or insurers and providers.
AB 1558 (Roger Hernández), of 2014, would have created the
California Health Data Organization within the University of
California to organize data provided by health plans and
insurers on a website to allow consumers to compare the prices
paid for procedures, as specified. AB 1558 was held on the
Senate Appropriations Committee suspense file.
SB 746 (Leno), of 2013, would have established new data
reporting requirements on all health plans applicable to
products sold in the large group market and established new
specific data reporting requirements related to annual medical
trend factors by service category, as well as claims data or
de-identified patient-level data, as specified, for a health
plan that exclusively contracts with no more than two medical
groups in the state to provide or arrange for professional
medical services for the enrollees of the plan (referring to
Kaiser Permanente). SB 746 was vetoed by the Governor, who
urged all parties to work together in the effort to make
health care costs more transparent.
SB 1196 (Hernandez), Chapter 869, Statutes of 2011, prohibits
a contract between a health plan insurer and a provider or
supplier, from prohibiting, conditioning, or in any way
restricting the disclosure of claims data related to health
care services provided to an enrollee or subscriber of the
health plan or carrier, or beneficiaries of any self-funded
health coverage arrangement administered by the carrier to a
qualified entity, as defined.
SB 751 (Gaines and Hernandez), Chapter 244, Statutes of 2011,
prohibits contracts between carriers and hospitals from
containing any provision that restricts the ability of the
carrier from furnishing information to enrollees or insureds
concerning cost range of procedures or the quality of
services.
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AB 2389 (Gaines), of 2009, would have prohibited a contract
between a health facility and a carrier from containing a
provision that restricts the ability of the carrier to furnish
information on the cost of procedures or health care quality
information to carrier enrollees. AB 2389 died in the
Assembly on Concurrence.
AB 2967 (Lieber), of 2008, would have established a Health
Care Cost and Quality Transparency Committee to develop and
recommend to the CHHS Secretary a health care cost and quality
transparency plan, and would have made the Secretary
responsible for the timely implementation of the transparency
plan. AB 2967 died on the Senate Inactive File.
SB 1300 (Corbett), of 2008, would have prohibited a contract
between a health care provider and a health plan from
containing a provision that restricts the ability of the
health plan to furnish information on the cost of procedures
or health care quality information to plan enrollees. SB 1300
died on the Senate Floor.
AB 1296 (Torrico), Chapter 698, Statutes of 2007, requires a
health plan or contractor offering health benefits to
California Public Employees' Retirement System (CalPERS)
members and annuitants to disclose to CalPERS the cost,
utilization, actual claim payments, and contract allowance
amounts for health care services rendered by participating
hospitals to each member and annuitant.
AB 1 X1 (Nuñez) of 2007, among many other provisions relating
to health care reform, contained nearly identical language as
that contained in AB 2967. AB1 X1 failed passage in the
Senate Health Committee.
7.Support. The California Primary Care Association writes that
stakeholders across California begin to work together to
develop the framework of this new and improved delivery
system, it has become increasingly clear that a single
trustworthy, accurate clearinghouse of claims and quality data
is necessary to move us in the direction we seek. The
National Multiple Sclerosis Society - California Action
Network states that there is no cure for MS and therefore,
individuals living with the disease manage it through medical
care and a myriad of prescription medications. This bill will
SB 26 (Hernandez) Page 13 of ?
provide an important resource for people living with a chronic
condition such as MS as it will address price transparency and
education consumers about health related expenses. AARP
states that information about the performance of our health
care system should be collected, analyzed, and made publicly
available, addressing safety, effectiveness, patient-centered
responsiveness, timeliness, equity, and efficiency. The
California Teachers Association states that making better
health care decisions requires a level of transparency that
has been a challenge within an industry that systematically
opposes transparency. Kaiser Permanente writes that as a
growing proportion of care is paid for through capitated,
bundled and value-based arrangements, health care data that is
based only on claims will provide an increasingly incomplete
and inaccurate picture of statewide costs and quality. Kaiser
believes that this bill will advance the critical conversation
in California about the best way to collect, measure, and
compare health care data toward achieving key policy goas of
improving health and the quality of care and reducing cost
trends over the long term.
8.Support if amended. Consumers Union (CU), Health Access
California, SEIU California, California Labor Federation, and
CALPIRG suggest amendments to create a public governance body
with a spectrum of viewpoints (including consumer advocates,
labor, and other purchasers) that would be responsible for
developing a plan to ensure comprehensive and efficient
collection of data from physicians, hospitals and other
sources. CU states that these provisions would ensure greater
public accountability for the design, implementation, and
oversight of the database and better ensure it develops the
information consumers want to choose the best-value care and
give providers the information and incentives they need to
improve their performance. CU contends that contracting out
certain data collection functions could still be undertaken,
but the parameters and prioritization would remain in the
public domain in a fully transparent way. Such a body should
have participation from diverse and varying points of view,
including consumer advocates, labor and other purchasers.
These groups urge a greater focus on health equity to be added
to the bill, so that disparities among different communities
can be monitored and ultimately reduced. Categories of data
elements need to be specified (such as race, ethnicity,
primary language spoken, ZIP code, and sexual orientation).
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Integrating stronger, more explicit health equity provisions
would make the database a more accurate and meaningful tool
for the critical task of reducing disparities and improving
community health.
Finally, these groups urge closing a loophole in section
127672(d)(3) that would prevent full transparency by allowing
providers to broadly deem contract information "proprietary"
and to require contract language that would allow information
required in other sections of the bill to be kept
confidential.
California Pan-Ethnic Health Network (CPEHN) also urges
inclusion of language to ensure a greater focus on health
equity and to ensure that the governance is responsive to the
needs of consumers. In addition, CPEHN proposes amendments
that would require the database to include the capability to
map data on mortality and morbidity rates as well as other
relevant data on the social and environmental factors that
impact health to better pinpoint areas with disparities and
highlight potential problems or incongruities in access and
quality of care.
9.Support in concept. CAPG writes that they support policy
measures that encourage the implementation of the Triple Aim
(decreased costs, improved patient experience and development
of population health management), appreciates the stakeholder
meetings conducted by the author, and look forward to working
together on the creation of such a database in the Golden
State.
10.Concerns. The California Association of Health Plans (CAHP)
are concerned that the database should be "searchable" by the
public when confidential and proprietary information is
included in the data submitted because it is unclear what will
be made public and how the information will be shared. CAHP
believes it is critical that specific contractual payment
arrangements remain confidential as proprietary information.
CAHP agrees that a neutral third party should be responsible
for the database; however, they recommend that the
organization convene a technical workgroup tasked with
developing the data elements to be collected rather than
specifying what should be initially included in the database
in statute. CAHP states that for the purposes of the initial
implementation it is recommended to use a phased-in plan
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approach based on enrollment size and that claims data should
begin with medical and pharmacy data, which would help to
identify coding and other data issues prior to including the
smaller and specialty plans that could be added after
implementation. If Medicare data is to be included, then the
database administer should apply to the federal Centers for
Medicare and Medicaid Services to be a Medicare Data Sharing
for Performance Program. Finally, CAHP writes that the use of
existing informational sources such HEDIS, OSHPD, and the
Department of Health Care Services should be included to avoid
the repetitious reporting of data and that these items could
be identified in the technical workgroup mentioned above and
the workgroup could be responsible for extracting the data
from these sources or could ensure that the database is
capable of receiving the data as currently extracted for these
systems.
11.Oppose. The California Right to Life Committee (CRLC) states
that heath care data will include patients requiring end of
life care and various groups are actively promoting end of
life plans, and they assume that one of these groups would be
involved in the process as a non-profit agency. CRLC also
states that these groups could be invited to the review
committee created under this bill and it foresees these groups
working in tandem with any statewide POLST registry or similar
end of life mandated health care form that removes the patient
from the decision making.
SUPPORT AND OPPOSITION :
Support: AARP
American Federation of State, County, and Municipal
Employees
California Primary Care Association
California Teachers Association
Kaiser Permanente
National Multiple Sclerosis Society - California
Action Network
Oppose: California Right to Life Committee, Inc.
-- END --
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