BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1159
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|AUTHOR: |Hernandez |
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|VERSION: |March 28, 2016 |
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|HEARING DATE: |April 6, 2016 | | |
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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)Requires, for the purpose of developing information for
inclusion in a cost and quality database, health plans,
insurers, self-insured employers, and suppliers and providers,
as defined, to provide to the CHHS Secretary:
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
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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.
2)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 1) above.
3)Permits the CHHS Secretary to report an entity's failure to
comply with 1) above to the entity's regulating agency.
Permits the regulating agency to enforce the requirement in 1)
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 1) above is not a crime.
4)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.
5)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.
6)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.
7)Requires the CHHS Secretary to convene an advisory committee,
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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
1) 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 advisory committee to hold public
meetings with stakeholders, solicit input, and set its own
meeting agendas. Makes advisory committee meetings subject to
the Bagley-Keene Open Meeting Act.
8)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 a cost
and quality database.
9)Prohibits the members of the advisory committee from receiving
per diem or travel expense reimbursement, or any other expense
reimbursement.
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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 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 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
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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
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
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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.
The Regional Cost and Quality Atlas is an interactive website
to be released in Summer 2016 that will compare aggregated
cost and quality data, by payer/product type (not individual
payers), for each of 19 regions (the same regions that had
been defined for Covered California). The project is a
partnership between the Integrated Healthcare Association
(IHA), the California Healthcare Foundation, and CHHS.
Working with large physician organizations and health plans,
IHA developed a methodology for calculating risk-adjusted
Total Cost of Care to be used as part of the Pay for
Performance program. Plans submit detailed data files
including claims and enrollment data to Truven Health Systems.
Truven uses this detail to calculate actual payments to
physician organizations for a set of enrollees divided by
number of enrollees. Payments include professional services,
pharmacy, hospital care, ancillary services, as well as
payments made by consumers to cover cost-sharing amounts.
Prior legislation. SB 26 (Hernandez of 2015) would have
required the CHHS Secretary 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. Would have required 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. SB
1322 was held on the Senate Appropriations Committee suspense
file.
SB 1322 (Hernandez of 2014), was substantially similar to SB
26. SB 1322 was held on the Assembly Appropriations Committee
suspense file.
SB 1182 (Leno, Chapter 577, Statutes of 2014), requires health
plans and insurers to share specified data with purchasers
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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.
AB 2389 (Gaines of 2009), would have prohibited a contract
between a health facility and a carrier from containing a
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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.
4)Support. 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.
5)Support if amended. Consumers Union and Health Access
California 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. These groups state that the proposed advisory
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committee does not go far enough to ensure that the database
meets the goals envisioned by the bill. Finally, these groups
urge closing a loophole 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.
Western Center on Law and Poverty appreciates that the bill
calls for the creation of a database with critical
information, but request an amendment deleting the exclusion
of negotiated contract price information.
California Pan-Ethnic Health Network (CPEHN) asks that the
bill be amended to refer to the database as the "California
Health Care Cost, Quality and Equity Database" as quality
interventions without explicit attention to disparities
reduction run the risk of leaving current disparities in place
or even worsening them. Including "health equity"
affirmatively in the title of the database will help to ensure
that future stewards of the database prioritize health equity
as part of all quality improvement efforts so disparities are
not ignored or potentially worsened. CPEHN also seeks
amendments to ensure that the governance of the database is
responsive to the needs of consumers. The proposed advisory
committee could be more responsive to consumer interests, as
both individuals and purchasers. A model that might be more
effective is that used by CalPERS, which has a governance
structure dominated by those it serves. Finally, CPEHN
believes that this protection of prices is overly broad and
could unnecessarily hinder consumers from accessing important
information on the prices paid for health care services.
6)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.
7)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. CAHP states that a neutral
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third party should be responsible for the database; however,
recommends 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 recommends that a prudent
approach for identifying elements for inclusion in the
database is necessary, and for the purposes of the initial
implementation it is recommended to use a phased-in plan
approach based on enrollment size. Claims data should begin
with medical and pharmacy data. CAHP states that 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. CAHP further states that this bill needs to take into
consideration the impact of the United States Supreme Court
decision ( Gobeille v. Liberty Mutual Insurance Co .), Case No.
14-181) that determined ERISA plans were protected from state
laws that interfere with central matters of plan
administration, such as the collection and reporting of data
required for an all payers claims database. Finally, CAHP
agrees that the use of existing informational sources such as
HEDIS, OSHPD, and DHCS should be included to avoid the
repetitious reporting of data. 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.
There are concerns with the enrollee demographics included in
the bill; particularly if plans do not currently collect this
information from enrollees.
8)Oppose unless amended. The Consumer Federation of California
(CFC) writes that while this bill states that all uses and
disclosures of data shall comply with all applicable state and
federal laws for the protection of the privacy and security of
data, including CMIA and HIPAA, this assurance actually
provides no privacy protections for the medical data being
analyzed because the CHHS Secretary and the database itself
are not covered entities under these laws. CFC further writes
that though this bill prohibits publicly disclosing
individually identifiable health information, this
restriction, in the absence of any prohibition against private
disclosure of this information, implies no limit to the
private disclosure of unaggregated, individually identifiable
information. The American Civil Liberties Union of California
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suggests amendments to extend existing medical privacy
protections to the database and its administrators, to place
limits on the private disclosure of unaggregated, individually
identifiable health information, to require encryption, and to
explicitly extend data breach notice and remedies to the
CHCCQB and its administrating agency.
SUPPORT AND OPPOSITION :
Support: AARP
Oppose: Consumer Federation of California (unless amended)
American Civil Liberties Union of California (unless
amended)
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