BILL NUMBER: SB 1159 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 15, 2016
AMENDED IN ASSEMBLY JUNE 30, 2016
AMENDED IN SENATE MAY 31, 2016
AMENDED IN SENATE MARCH 28, 2016
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 Cost, Quality, and Equity Transparency
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, security, and confidentiality of data
and would prohibit the disclosure of any unaggregated, individually
identifiable health information or medical information. The bill
would also require individually identifiable health information and
medical information to be protected by security measures including,
but not limited to, encryption. 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
authorize the secretary to enter into contracts or agreements to
share the information collected under the bill, under prescribed
conditions.
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, 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
bill would require the secretary to arrange for the preparation of a
report to the Legislature and the Governor, to be submitted by
January 1, 2019, that examines and addresses specified issues,
including, among others, containing the cost of health care services
and coverage. The bill would prohibit members of the committee from
receiving 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.
This bill would require the California Health and Human Services
Agency to research the options for developing a cost, quality, and
equity transparency database. The bill would require the research to
include certain topics, including, among others, identification of
key data submitters and a comparative analysis of potential models
used in other states. The bill would authorize the agency to enter
into contracts or agreements to conduct the research and would
require the agency to make the results of the research available to
the public no later than March 1, 2017, by submitting a report to the
Assembly and Senate Committees on Health.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) It is the intent of the
Legislature in enacting this act to make that
cost and quality data be made available and 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.
(b) It is further the intent of the Legislature that a cost,
quality, and equity transparency database be utilized in California
to inform efforts to:
(1) Assess California health care needs and available resources.
(2) Contain the cost of health care services and coverage.
(3) Improve the quality and medical appropriateness of health
care.
(4) Eliminate or reduce health disparities and address the social
determinants of health.
(5) Increase the transparency of health care costs and the
relative efficiency with which care is delivered.
(6) Promote the 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) Assess the value and encourage the efficient utilization of
prescription drugs and technology.
(8) Reduce unnecessary, inappropriate, and wasteful health care.
(9) Educate consumers in the use of health care information.
SEC. 2. 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.
SEC. 3. 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
COST, QUALITY, AND EQUITY TRANSPARENCY DATABASE
127670. (a) (1)
Solely for the purpose of developing information for inclusion in a
health care cost and quality database, and consistent
The California Health and Human Services Agency shall research the
options for developing a cost, quality, and equity transparency
database that is consistent with paragraph (9) of subdivision
(b) of Section 56.10 of the Civil Code, a health
Code. This research shall include all of the following:
(1) Identification of key data
submitters, including health care service plan,
including a plans, specialized health care
service plan, an insurer plans, insurers
licensed to provide health insurance, as defined in Section 106
of the Insurance Code, a supplier,
suppliers, as defined in paragraph (3) of subdivision (b) of
Section 1367.50, or a provider, providers,
as defined in paragraph (2) of subdivision (b) of Section
1367.50, shall, and a self-insured
employer, a employers, multiemployer
self-insured plan that is plans that are
responsible for paying for health care services provided to
beneficiaries, and the trust administrator
trust administrators for a multiemployer
self-insured plan may, provide all of the following to the
Secretary of California Health and Human Services:
plans.
(2) A comparative analysis of potential models used in other
states and an assessment of the extent to which information in
addition to the following should be included in the cost, quality,
and equity transparency database:
(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 All-Payer
Claims Database 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) (A) Subject to paragraph (9) of subdivision (b) of
Section 56.10 of the Civil Code, 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
104-191), 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.
(B) Use and disclosure of data pursuant to this section shall be
consistent with privacy and security protections for individually
identifiable health information and medical information under state
and federal law, including any applicable exceptions to the
requirement to obtain patient authorization, including, but not
limited to, paragraph (9) of subdivision (b) of, and paragraph (7) of
subdivision (c) of, Section 56.10 of the Civil Code.
(2) (A) All policies and protocols developed pursuant to this
section shall ensure that the privacy, security, and confidentiality
of individually identifiable health information and medical
information is protected. The secretary shall not disclose any
unaggregated, individually identifiable health information or medical
information and shall develop a protocol for assessing the risk of
reidentification stemming from disclosure of any health information
and medical information that is aggregated, individually identifiable
health information, or medical information. This paragraph does not
preclude sharing individually identifiable health information that is
not aggregated with researchers for research purposes, consistent
with paragraph (7) of subdivision (c) of Section 56.10 of the Civil
Code.
(B) For the purposes of this paragraph, the following terms have
the following meanings:
(i) "Individually identifiable health information" has the same
meaning as in Section 160.103 of Title 45 of the Code of Federal
Regulations.
(ii) "Medical information" has the same meaning as in Section
56.05 of the Civil Code.
(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.
(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.
(d) (1) The agency administering the California Health Care Cost
and Quality Database shall adopt rigorous standards of security
protection to ensure as nearly as possible that the information
contained in and collected for the purposes of the California Health
Care Cost and Quality Database is not compromised. This shall
include, but is not limited to, requiring encryption.
(2) For the purposes of paragraph (1), the term "encryption" means
the protection of data in electronic form, in storage or in transit,
using an encryption technology that has been generally accepted by
experts in the field of information security that renders data
indecipherable in the absence of associated cryptographic keys
necessary to enable decryption of the data. "Encryption" includes
appropriate management and safeguards of cryptographic keys to
protect the integrity of the encryption.
(e) For purposes of this section, the California Health and Human
Services Agency is an agency subject to Chapter 1 (commencing with
Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code.
(3) An assessment of types of governance structures that
incorporate representatives of health care stakeholders and experts,
including, but not limited to, representatives of data submitters and
representatives of purchasers, such as businesses, organized labor,
and consumers.
(4) Recommendations on potential funding approaches to support the
activities of the cost, quality, and equity transparency database
that recognize federal and state confidentiality of medical
information laws.
(5) An assessment on the extent to which the cost, quality, and
equity transparency database could be developed in conjunction with
existing public or private activities, including an assessment of the
trade-offs associated with housing the database inside or outside of
state government.
(6) Consultation with a broad spectrum of health care stakeholders
and experts, including, but not limited to, representatives of
purchasers, such as organized labor, consumers, and businesses.
(b) The agency may enter into contracts or agreements to conduct
the research described in subdivision (a).
(c) (1) The agency shall make the results of the research
described in subdivision (a) available to the public no later than
March 1, 2017, by submitting a report to the Assembly and Senate
Committees on Health.
(2) Pursuant to Section 10231.5 of the Government Code, this
subdivision shall become inoperative on January 1, 2021.
(d) The agency may use federal funds for the purpose of this
section.
127672. (a) The secretary 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 127670 and representatives of purchasers, including, but not
limited to, businesses, organized labor, and consumers, 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 a report,
which shall be submitted to the Legislature and the Governor, on or
before January 1, 2019, 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.
(c) (1) A report submitted under subdivision (b) shall be
submitted in compliance with Section 9795 of the Government Code.
(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.
(d) Notwithstanding any other law, the members of the advisory
committee shall not receive per diem or travel expense reimbursement,
or any other expense reimbursement.
SEC. 4. The Legislature finds and declares that
Section 3 of this act, which adds Section 127670 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, it is necessary for that information to
remain confidential.