Amended in Senate May 31, 2016

Amended in Senate March 28, 2016

Senate Bill No. 1159

Introduced by Senator Hernandez

February 18, 2016

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 1159, 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 require certain health care entities, including health care service plans, to provide specified information to the Secretary of California Health and Human Services. The bill would authorize the secretary 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. begin insert The bill would authorize the secretary to enter into contracts or agreements to share the information collected under the bill, under prescribed conditions. end insert

This bill would also require the secretary to convene an advisory committee composed of a broad spectrum of health care stakeholders and experts, as specified, begin delete to, among other things, develop the parameters for establishing, implementing, and administering end delete begin insert to identify the type of data, purpose of use, and entities and individuals that are required to report to, or that may have access to, end insert a health care cost and quality database. The bill would require the secretary to arrange for the preparation of begin delete an annual end delete begin insert a end insert report to the Legislature and the begin delete Governor end delete begin insert Governor, to be submitted by January 1, 2019, end insert that examines and addresses specified issues, including, among others, containing the cost of health care services and coverage. The bill would begin delete provide that end delete begin insert prohibit end insert members of the committee begin delete not receive end delete begin insert from receiving end insert 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:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert It is the intent of the Legislature in enacting this
act to make cost and quality data available and to end insert begin insert encourage health
care service plans, health insurers, and providers to develop
innovative approaches, services, and programs that may have the
potential to deliver health care that is both cost effective and
responsive to the needs of enrollees, including recognizing the
diversity of California and the impact of social determinants of
health. end insert

begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

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

begin delete SEC. 2. end delete

begin insert SEC. 3. end insert   

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

 

Chapter  8. California Health Care Cost and Quality
Database

 

begin delete

127670.  

(a) It is 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 patient-centered, timely,
affordable, and equitable. It is also the intent of the Legislature to
grant access to provider performance information to consumers
and purchasers in order for them to understand the potential
financial consequences and liabilities and obtain maximum quality
and value and to minimize health disparities in health care services.

(b) It is the intent of the Legislature, by making cost and quality
data available, to encourage health care service plans, health
insurers, and providers to develop innovative approaches, services,
and programs that may have the potential to deliver health care
that is both cost effective and responsive to the needs of enrollees,
including recognizing the diversity of California and the impact
of social determinants of health.

end delete

begin delete 127671. end delete

begin insert 127670. end insert   

(a) (1) Solely for the purpose of developing
information for inclusion in a health care cost and quality database,
a health care service plan, including a specialized health care
service plan, an insurer licensed to provide health insurance, as
defined in Section 106 of the Insurance Code, a supplier, as defined
in paragraph (3) of subdivision (b) of Section 1367.50, or a
provider, as defined in paragraph (2) of subdivision (b) of Section
1367.50, shall, and a self-insured employer, 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 may, provide all of the following
to the Secretary of California Health and Human Services:

(A) Utilization data from the health care service plans’ and
insurers’ medical, dental, and pharmacy claims or, 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.

(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 or, 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.

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

(2) (A) The secretary may report an entity’s failure to comply
with paragraph (1) to the entity’s regulating agency.

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

(b) (1) All uses and disclosures of data made pursuant to this
section shall comply with all applicable state and federal laws for
the protection of the privacy and security of data, including, but
not limited to, the Confidentiality of Medical Information Act (Part
2.6 (commencing with Section 56) of Division 1 of the Civil Code),
the Information Practices Act of 1977 (Chapter 1 (commencing
with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil
Code), Title 1.81 (commencing with Section 1798.80) of Part 4
of Division 3 of the Civil Code, and the federal Health Insurance
Portability and Accountability Act of 1996 (Public Law begin delete 104-191) end delete
begin insert 104-191), end insert and the federal Health Information Technology for
Economic and Clinical Health Act, Title XIII of the federal
American Recovery and Reinvestment Act of 2009 (Public Law
111-5), and implementing regulations.

(2) (A) All policies and protocols developed pursuant to this
section shall ensure that the privacy, security, and confidentiality
of individually identifiable health information is protected. The
secretary shall not publicly disclose any unaggregated, individually
identifiable health information and shall develop a protocol for
assessing the risk of reidentification stemming from public
disclosure of any health information that is aggregated, individually
identifiable health information.

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

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

begin insert

(c) The secretary may enter into contracts or agreements to
share the information collected under this section for the purposes
of this chapter, provided that any use of that information complies
with the requirements of this section.

end insert

127672.  

(a) The Secretary of California Health and Human
Services shall convene an advisory 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 subdivision (a) of Section
begin delete 127671 end delete begin insert 127670 end insert and representatives of purchasers, including, but
not limited to, businesses, organized labor, and consumers, begin delete to
develop the parameters for the establishment, implementation, and
ongoing administration of a health care cost and quality database,
including a business plan for sustainability without using moneys
appropriated from the General Fund, and end delete to identify the type of
data, purpose of use, and entities and individuals that are required
to report to, or that may have access to, a health care cost and
quality database. The advisory committee shall hold public
meetings with stakeholders, solicit input, and set its own meeting
agendas. Meetings of the advisory committee are subject to the
Bagley-Keene Open Meeting Act (Article 9 (commencing with
Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of
the Government Code).

(b) The secretary shall arrange for the preparation of begin delete an annual
report end delete begin insert a report, which shall be submitted end insert to the Legislature and
the begin delete Governor, to be submitted in compliance with Section 9795
of the Government Code, end delete begin insert Governor on or before January 1, 2019, end insert
based on the findings of the advisory committee, including input
from the public meetings, that shall, at a minimum, examine and
address the following issues:

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

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

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

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

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

(6) Use of disease management, wellness, prevention, and other
innovative programs to keep people healthy, reduce disparities
and costs, and improve health outcomes for all populations.

(7) Efficient utilization of prescription drugs and technology.

(8) Reducing unnecessary, inappropriate, and wasteful health
care.

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

begin delete

(10) Using existing data sources to build a health care cost and
quality database.

end delete begin insert

(c) (1) A report submitted under subdivision (b) shall be
submitted in compliance with Section 9795 of the Government
Code.

end insert begin insert

(2) The requirement for submitting a report pursuant to
subdivision (b) is inoperative on July 1, 2022, pursuant to Section
10231.5 of the Government Code.

end insert begin delete

(c)

end delete

begin insert (d) end insert  Notwithstanding any other law, the members of the advisory
committee shall not receive per diem or travel expense
reimbursement, or any other expense reimbursement.

begin delete SEC. 3. end delete

begin insert SEC. 4. end insert   

The Legislature finds and declares that Section begin delete 2 end delete begin insert 3 end insert of
this act, which adds Section begin delete 127671 end delete begin insert 127670 end insert to the Health and
Safety Code, imposes a limitation on the public’s right of access
to the meetings of public bodies or the writings of public officials
and agencies within the meaning of Section 3 of Article I of the
California Constitution. Pursuant to that constitutional provision,
the Legislature makes the following findings to demonstrate the
interest protected by this limitation and the need for protecting
that interest:

In order to protect confidential and proprietary information
submitted to the Secretary of California Health and Human
Services, it is necessary for that information to remain confidential.