BILL ANALYSIS                                                                                                                                                                                                    Ó



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          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                  |                     |
          |                |     |                       |                     |
          |----------------+-----+-----------------------+---------------------|








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          |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:










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               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  








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               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:










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          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.  








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          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:                                             








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                          Kristene Mapile / HEALTH / (916) 319-2097  FN:  
          0004605