BILL ANALYSIS Ó
SB 1159
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1159
(Hernandez) - As Amended June 30, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires data reporting by health care entities to the
California Health and Human Services Agency (CHSSA), for
purposes of developing a California Health Care Cost and Quality
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Database. Specifically, this bill:
1)Requires reporting by the following entities:
a) Health plans and health insurers (self-insured employers
and multiemployer self-insured plans are authorized, but
not required, to report data).
b) Providers, defined as hospitals, skilled nursing
facilities, comprehensive outpatient rehabilitation
facilities, home health agencies, hospices, clinics, and
rehabilitation agencies.
c) Suppliers defined a physicians or other health care
practitioners, or entities that furnish health care
services other than a provider.
1)Specified reports must include utilization data, pricing data,
and information related to the social determinants of health.
2)Establishes an advisory committee 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.
3)Requires the advisory committee to issue a report addressing
specified issues related to health care cost, quality,
efficiency, and transparency, as well as health disparities
and wellness.
4)Includes a number or privacy provisions that intend to protect
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consumers from unauthorized information disclosure, as well as
provisions that protect confidentiality of negotiated
contracts between health plans and providers or suppliers.
FISCAL EFFECT:
1)One-time GF costs of $40,000 to CHHSA to provide staff support
to the required advisory committee and to develop the report
on health care utilization and financing issues. Ongoing
costs are expected to be minor.
2)A number of state health care regulators are likely to incur
costs to enforce data reporting requirements. Enforcement
costs are inherently difficult to project; in this case costs
would depend on the ultimate scope of data collection
requirements, which is to be decided by the advisory
committee, and the level of compliance. Enforcement costs are
estimated as follows:
a) Potential ongoing costs of about $100,000 per year for
Department of Insurance enforcement of the requirement to
report data by insurers (Insurance Fund) and indeterminate
costs for Department of Managed Health Care enforcement of
the requirement to report data by health plans (Managed
Care Fund.)
b) Potential, likely minor and absorbable, enforcement
costs to other regulatory entities including the California
Department of Public Health, which oversees health
facilities, and regulatory boards within the Department of
Consumer Affairs, such as the Medical Board of California.
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3)GF cost pressure to develop and maintain a database, estimated
in the low millions one-time for start-up costs and low
millions ongoing, based on an analysis by Manatt Health
Solutions of a California-specific database. Actual costs
would be subject to numerous decisions about the business
requirements of such a system, and could vary significantly
depending upon existing capabilities of bidders, assuming the
database implemented through a contract. It should be noted
this bill does not explicitly require the database to be
constructed, but it authorizes related activities.
COMMENTS:
1)Purpose. 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. This bill is supported by consumer and health care
advocates, and has no opposition.
2)Background. Given the high and growing cost of health care
services, there is considerable interest in transparency and
containment of health care costs among policymakers, payers,
purchasers, and the public. Indeed, there has been a
significant amount of discussion in California about the
creation of a cost and quality database. A failed federal
grant application for a project entitled California State
Innovation Model (CalSIM), submitted by the CHHSA in 2014,
included the creation of such a database. The CalSIM effort
identified a price and quality transparency system as a
critical building block in the effort to transform and improve
the health care system.
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Other projects are underway as well. The California
Healthcare Performance Initiative is a private non-profit
initiative currently collecting Medicare fee-for-service
claims data, as well as private health plan claims data, and
is in the process of integrating these data sources. In
addition, a recent federal grant received by CDI supported a
consumer-facing website called California Healthcare Compare,
which launched last year to provide consumer-friendly
information on health care costs and quality for various
common procedures. Finally, the Regional Cost and Quality
Atlas is an interactive Website to be released this summer
that will compare aggregated cost and quality data, by payer
and product type, for each of 19 California regions.
3)All-Payer Claims Databases, or APCDs, are large-scale
databases that systematically collect health care claims
(itemized statements of health care services and costs and/or
payments) as well as eligibility and provider files from
private and public payers. APCDs can be used to fill in
critical information gaps for state agencies, support health
care and payment reform initiatives, and create transparency
for consumers, purchasers, and state agencies. According to
the National Conference of State Legislatures, by January 2016
at least 18 states had enacted APCDs while more than a dozen
others considered such a law or program. Though the data
envisioned to be collected by this bill is slightly broader
than simply claims, the concept is very similar to an APCD.
4)Financing. The Robert Wood Johnson Foundation indicates states
have a variety of strategies for funding APCDs and financially
sustaining the databases over the long term. Public APCDs are
typically funded, at least in part, through general
appropriations or industry fee assessments. States have also
identified private grant funding to support the initial phases
of APCD development. Federal grant funding and Medicaid
funding is another potential funding source. Many states also
expect a portion of ongoing funding will come from data
product sales.
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5)Prior Legislation.
a) SB 26 (Hernandez) of 2015 and SB 1322 (Hernandez) of
2014 were similar to this bill. SB 26 was held on the
Senate Appropriations Committee suspense file, and SB
1322 was held on the suspense file of this committee.
b) 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.
6)Staff Comments. This bill does not identify a funding source.
Staff suggests costs to support a database should accrue to
beneficiaries of database activities. If the state, as a
payer, purchaser, and regulator of health care, is the prime
beneficiary, the state has the responsibility to be the
primary funder of database operations, whether through the GF,
federal funds, existing special funds whose purposes are
sufficiently aligned with the bill's intent, or, as other
states have established, a special assessment to support the
Database. Other states have demonstrated such data has
significant potential to pay dividends for the state, in terms
of health care cost savings and quality improvement, fraud
prevention, monitoring and oversight, and identification of
trends, among other things. If the intent is also to serve
other interests, these other beneficiaries should also pay to
support the Database, through data product sales, for example.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081
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