BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1159|
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THIRD READING
Bill No: SB 1159
Author: Hernandez (D)
Amended: 5/31/16
Vote: 21
SENATE HEALTH COMMITTEE: 8-0, 4/6/16
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Pan, Roth,
Wolk
NO VOTE RECORDED: Nielsen
SENATE JUDICIARY COMMITTEE: 5-2, 4/19/16
AYES: Jackson, Hertzberg, Leno, Monning, Wieckowski
NOES: Moorlach, Anderson
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/27/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
SUBJECT: California Health Care Cost and Quality Database
SOURCE: Author
DIGEST: This bill 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 California Health and
Human Services (CHHS) Secretary specified utilization data and
pricing information.
ANALYSIS:
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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
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
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specified health plans and insurers to submit reports to state
and federal regulators on medical loss ratios, rate filings,
enrollment data, as specified.
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 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
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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, the Health Insurance
Portability and Accountability Act (HIPPA) 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,
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.
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
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Open Meeting Act.
8)Requires CHHS to arrange for the preparation of a report to
the Legislature and the Governor, by January 1, 2019 and 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; and,
h) Educating consumers in the use of health care
information.
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9)Prohibits the members of the advisory committee from receiving
per diem or travel expense reimbursement, or any other expense
reimbursement.
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
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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
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.
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 Web site, 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 CDI on a medical cost and quality transparency
website. According to CDI, the Web site 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 Web site is
expected to provide price information for 95 to 99 episodes of
care or conditions. Five 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,
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appropriateness, and outcome measures.
The Regional Cost and Quality Atlas is an interactive Web site
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.
4)Consumer and provider group letters. A number of groups
submitted letters related to this bill stating that the bill
would provide the public and policymakers with critical
information, but request a number of amendments related to how
to house and disseminate the data. These groups state that
the proposed advisory committee does not go far enough to
ensure that the database meets the goals envisioned by the
bill. The California Association of Physician Groups 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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
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1)Likely ongoing costs in the hundreds of thousands per year to
provide staff support to the required advisory committee and
to develop the report on health care utilization and financing
issues (General Fund).
2)Ongoing costs of about $100,000 per year for CDI enforcement
of the requirement to report data by insurers (Insurance
Fund.)
3)Likely ongoing costs up $100,000 per year for DMHC enforcement
of the requirement to report data by health plans (Managed
Care Fund.)
SUPPORT: (Verified5/31/16)
AARP
CAPG
OPPOSITION: (Verified 5/31/16)
Consumer Federation of California
American Civil Liberties Union of California
ARGUMENTS IN 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.
ARGUMENTS IN OPPOSITION: 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
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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 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.
Prepared by:Melanie Moreno / HEALTH / (916) 651-4111
5/31/16 21:42:46
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