BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1159 (Hernandez) - California Health Care Cost and Quality
Database
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|Version: March 28, 2016 |Policy Vote: HEALTH 8 - 0, JUD. |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 16, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1159 would require the Secretary of Health and
Human Services to convene an advisory committee to develop the
parameters for the establishment and implementation of a health
care cost and quality database. The bill would require health
insurers and health plans to provide specified health care
utilization and cost information to the Secretary for inclusion
in a health care cost and quality database.
Fiscal
Impact:
Likely ongoing costs in the hundreds of thousands per year to
provide staff support to the required advisory committee,
develop the parameters for a health care cost and quality
database, develop a business plan for the database, and to
develop an annual report on health care utilization and
financing issues (General Fund).
To the extent that the state does develop and implement a
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health care cost and quality database as envisioned in the
bill, costs would be as follows:
o One-time costs between $3 million and $10 million
for planning and initial policy development relating to
the proposed database (unknown fund source).
o 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).
o 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).
o Unknown potential fee revenues. The bill does not
specifically address whether charging fees for access to
the database would be allowed. It may be possible to
develop data sets and analyses for outside 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 (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 health
outcomes.
There are several efforts underway in the state to compile
health care utilization, cost, and/or quality data in a central
repositories for analysis. The California Healthcare Performance
Information system is a database that will include data on
physician services from three health plans (Anthem, Blue Cross,
and United Health Care) and Medicare. Also, the University of
California, San Francisco is developing a medical cost and
SB 1159 (Hernandez) Page 2 of
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quality database under contract from the Department of
Insurance. That database will include information on prices for
care for certain chronic conditions. Finally, the Regional Cost
and Quality Atlas will compare aggregated cost and quality data
by payer and product type (not individual payers). That effort
is a partnership between the Integrated Health Care Association
and the state Health and Human Services Agency
Proposed Law:
SB 1159 would require the Secretary of Health and Human
Services to convene an advisory committee to develop the
parameters for the establishment and implementation of a health
care cost and quality database. The bill would require health
insurers and health plans to provide specified health care
utilization and cost information to the Secretary for inclusion
in a health care cost and quality database.
Specific provisions of the bill would:
Require health insurers and health plans to provide
specified information on health care utilization, pricing
information, and patient/enrollee demographic information
to the Secretary of Health and Human Services, for
inclusion in a health care cost and quality database;
Authorize self-insured employers, multiemployer
self-insured plans, and trust administrators for
multi-employer self-insured plans to provide the
information described above;
Authorize regulatory agencies to enforce the requirement
that health insurers and health plans provide the required
information;
Require information disclosures to comply with specified
federal and state privacy protection laws and regulations;
Require the Secretary to convene an advisory committee
to develop the parameters for the establishment,
implementation, and ongoing administration of a health care
cost and quality database;
Require the plan to address ongoing funding of the
database (without using state General Fund monies), data
requirements, who would have access to the database, and
other issues;
Require the Secretary to provide an annual report to the
Legislature and the Governor, based on findings from the
advisory committee, that addresses a variety of issues
relating to health care needs, utilization, costs, and
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quality.
Related
Legislation:
SB 26 (Hernandez) would have required the California
Health and Human Services Agency to contract with a
nonprofit entity to create a health care cost and quality
database. That bill was held on this committee's Suspense
File.
SB 1322 (Hernandez, 2014) was substantially similar to
SB 26. 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 state of Colorado has developed an all payer
claims database similar in functionality to the one envisioned
in this bill. The cost estimates above 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.
The California Health and Human Services Agency 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 envisioned 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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