BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 26 (Hernandez) - California Health Care Cost and Quality
Database
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|Version: May 5, 2015 |Policy Vote: HEALTH 7 - 0, JUD. |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 18, 2015 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 26 would require the California Health and Human
Services Agency to contract with a nonprofit entity to create a
health care cost and quality database.
Fiscal
Impact: The state of Colorado has developed an all payer claims
database similar in functionality to the one required in this
bill. The following cost estimates are informed by the actual
expenditures to develop and operate the Colorado All Payer
Claims Database. Due to the size and complexity of the
California healthcare marketplace, staff anticipates that the
cost to develop and maintain an all payer claims database is
likely to be two to five times the cost incurred in Colorado.
SB 26 (Hernandez) Page 1 of
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One-time costs between $3 million and $10 million for
planning and initial policy development relating to the
proposed all payer claims database (unknown fund source).
One-time costs between $15 million and $30 million to
create the database, including the information technology
infrastructure to accept data submissions from payers,
review submitted claims data, and analyze claims data
(unknown fund source).
Ongoing operations and maintenance costs between $5 million
and $12 million per year for operations and maintenance of
the database, data analysis, and other administrative costs
(unknown fund source).
Unknown potential fee revenues. The Colorado All Payer
Claims Database is supported, in part, by fees charged for
access to data or specific reports prepared by the staff. SB
26 does not specifically address whether this would be
allowed under the bill. The bill does generally require
information in the database to be searchable by the public.
It may be possible to meet this requirement for public
accessibility, while also developing data sets and analyses
for outsider purchasers as a revenue generating mechanism.
Background: Several other states have established all payer databases to
assist in the analysis of health care markets, to increase
transparency and potentially reduce health care spending over
the long run. In general, an all payer claims database is used
to collect claims data from some or all payers (potentially
including private insurers, private health plans, employers, and
state and federal health care programs such as Medicare or
Medicaid programs). By collecting claims data in a central
database, states hope to improve transparency by analyzing the
costs for health care services and potentially tying those costs
to outcomes.
Currently there are two efforts to implement all payer claims
databases in California. The California Healthcare Performance
Information system is a database that will include data on
physician services from three health plans and Medicare. Also,
the University of California, San Francisco is developing a
SB 26 (Hernandez) Page 2 of
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medical cost and quality database under contract from the
Department of Insurance. That database will include information
on prices for care for certain chronic conditions.
Proposed Law:
SB 26 would require the Health and Human Services Agency to
contract with a nonprofit entity to create a health care cost
and quality database.
Specific provisions of the bill would:
Require the California Health and Human Services agency, by
January 1, 2017, to use a competitive process to contract
with one or more nonprofit corporations to develop the
California Health Care Cost and Quality Database;
Specify the requirements for the contracting nonprofit;
Require health plans, health insurers, self-insured
employers, and licensed health care providers to provide
information for inclusion in the database, including
utilization and pricing data;
Authorize multiemployer self-insured plans and trust
administrators for multiemployer self-insured plans to
report similar data;
Authorize the nonprofit to report noncompliance with
reporting requirements to the appropriate regulating entity;
Authorize the regulating entity to enforce compliance;
Specify the requirements for protection of confidential
information by the nonprofit;
Specify the types of data to be collected and analyzed;
Require the nonprofit to create a publicly-accessible,
searchable database of information on health care costs and
quality information;
Prohibit the use of General Fund for the development or
operations of the system;
Require the Agency to convene a review committee to develop
plans for the development and administration of the system,
including a business plan;
Require annual reporting to the Legislature by the Agency;
Prohibit the establishment of the review committee until
the Director of Finance determines that sufficient private
funds or federal funds have been received and have been
appropriated for that purpose.
Related
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Legislation:
SB 1322 (Hernandez, 2014) was substantially similar to this
bill. That bill was held on the Assembly Appropriations
Committee's Suspense File.
AB 1558 (R. Hernandez, 2014) would have requested the
University of California to develop a cost and quality
database. That bill was held on this Committee's Suspense
File.
Staff
Comments: The California Health and Human Services Agency has
developed a State Health Care Innovation Plan, which is a plan
to improve the state's health care system. Among the many
elements of the plan is a plan for an all payer claims database,
similar to what is required in this bill. However, upon applying
for federal funding for the Innovation Plan, the state received
only a $3 million grant for future planning efforts and no grant
funds for implementation of the Innovation Plan. At this time,
the federal government has not indicated that there will be
additional funds for implementation available to the state.
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