BILL ANALYSIS Ó SB 1159 Page 1 SENATE THIRD READING SB 1159 (Hernandez) As Amended August 19, 2016 Majority vote SENATE VOTE: 25-12 -------------------------------------------------------------------- |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+-----------------------+---------------------| |Health |14-3 |Wood, Maienschein, |Lackey, Patterson, | | | |Bonilla, Burke, |Steinorth | | | |Campos, Chiu, Gomez, | | | | |Roger Hernández, | | | | |Nazarian, | | | | |Ridley-Thomas, | | | | |Rodriguez, Santiago, | | | | |Thurmond, Waldron | | | | | | | |----------------+-----+-----------------------+---------------------| |Privacy |11-0 |Chau, Wilk, Baker, | | | | |Calderon, Chang, | | | | |Cooper, Dababneh, | | | | |Gatto, Gordon, Low, | | | | |Olsen | | | | | | | |----------------+-----+-----------------------+---------------------| SB 1159 Page 2 |Appropriations |16-4 |Gonzalez, Bloom, |Bigelow, Gallagher, | | | |Bonilla, Bonta, |Jones, Wagner | | | |Calderon, Chang, Daly, | | | | |Eggman, Eduardo | | | | |Garcia, Holden, | | | | |Obernolte, Quirk, | | | | |Santiago, Weber, Wood, | | | | |McCarty | | | | | | | | | | | | -------------------------------------------------------------------- SUMMARY: Establishes the California Health Care Cost, Quality, and Equity Data Atlas. Specifically, this bill: 1)Requires the California Health and Human Services Agency (CHHSA) to research the options for developing a cost, quality, and equity transparency database that is consistent with the confidentiality of medical information in existing law. 2)Requires this research to include all of the following: a) Identification of key data submitters, including health care service plans (health plans), health insurers, suppliers, providers, and self-insured employers, as defined; b) 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: SB 1159 Page 3 i) Utilization data from health plan and health insurers' 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 All-Payer Claims Database Council, the University of New Hampshire, and the National Association of Health Data Organizations; ii) Pricing information for health care items, services, and medical and surgical episode 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; iii) 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 are peer-reviewed evidence; and, iv) Clinical data from health care service plans, integrated delivery systems, hospitals, and/or clinics that is not included in the core set of data elements for data submission proposed by the All Payer Claims Database Council and the National Association of Health Data Organizations. c) An assessment of types of governance structures that SB 1159 Page 4 incorporate representatives of health care stakeholders and experts, as specified; d) 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; e) 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, as specified; and, f) Consultation with a broad spectrum of health care stakeholders and experts, as specified. 3)Permits CHHSA to enter into contracts or agreements to conduct the research described above. 4)Requires CHHSA to make public the results of the research described above no later than March 1, 2017, by submitting a report to the Assembly and Senate Committees on Health. 5)Sunsets on January 1, 2021. 6)Permits the CHHSA to use federal funds. FISCAL IMPACT: According to the Assembly Appropriations Committee: SB 1159 Page 5 1)The activities required here are not expected to result in significant additional state costs, as they are largely consistent with existing activities of CHHSA, funded by an existing federal grant. CHHSA will incur minor costs to submit a legislative report by March 1, 2017. 2)It should be noted this bill does not explicitly require a database to be constructed, but it authorizes a study and related activities. Development of a database as contemplated here, if it were to be housed in the state, would result in General Fund cost pressure 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. This bill requires an analysis of potential funding sources to support the database. COMMENTS: 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 Senate Health 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 federal Patient Protection and Affordable Care Act. 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. SB 1159 Page 6 All-Payer claims databases. In 2007, the Regional All-Payer Healthcare Information Counsel (Counsel) began as a convening organization to bring together several Northeast states that had, or were developing, All-Payer Claims Database (APCD) systems. The Counsel's vision was to support cross-state data harmonization and analytic activities. In 2010, the Counsel changed its name to the APCD Council to reflect the expanded reach. The APCD Council is a learning collaborative with a multi-fold purpose of serving an information sharing capacity for those states that have developed, or are developing APCD; providing technical assistance to states; and, catalyzing states to achieve mutual goals. Some of APCD Council's current activities include harmonizing the data collection and data release rules across the multiple state databases; developing a strategy for integrating Medicare data into the all payer databases; sharing reporting applications being developed by states; policy analysis; and, supporting other states developing all-payer claims databases. By January 2016, at least 18 states had enacted APCDs while more than a dozen others considered such a law or program. They are designed to inform cost containment and quality improvement efforts. 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. Analysis Prepared by: SB 1159 Page 7 Kristene Mapile / HEALTH / (916) 319-2097 FN: 0004605