BILL ANALYSIS
AB 794
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Date of Hearing: April 20, 2005
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Jerome Horton, Chair
AB 794 (Chu) - As Amended: March 29, 2005
SUBJECT : Public records: health care contracts.
SUMMARY : Provides that health care contracts shall be open to
inspection by the Legislative Analyst's Office (LAO). Makes
other technical changes.
EXISTING LAW :
1)Requires public agencies to make its records available for
public inspection unless specific exemptions apply.
2)Provides that records relating to the negotiation of contracts
for health coverage entered into by the state with health
plans under specified programs generally are exempt from
disclosure but that those contracts, except for rates, shall
be open to public inspection one year after being executed,
and the rates in those contracts shall be open to public
inspection 3 years after being executed.
3)Provides that, notwithstanding these provisions, each entire
contract shall be open to inspection by the Joint Legislative
Audit Committee.
FISCAL EFFECT : Unknown.
COMMENTS :
1)Purpose of the bill . AB 794 would allow the LAO to inspect
contract rates of health plans entered into with the Managed
Risk Medical Insurance Board (MRMIB). Records include rates
of payment from the state to health plans, and MRMIB's
discussions, communications, or any other portion of the
negotiations with health plans. AB 794 is intended to build
upon provision of SB 1103 (Chapter 228, Statutes of 2004), the
health budget trailer bill to implement the health-related
statutory changes for the 2004 Budget Act, by furthering
legislative oversight of MRMIB's programs.
2)Background . The California Public Records Act generally
AB 794
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provides that public agencies make their records available for
public inspection. Certain records are exempt from disclosure
to the public and the LAO. Contracts with health plans
entered into by the MRMIB for the Healthy Families Program,
the Major Risk Medical Insurance Program (MRMIP), and the
Access for Infant and Mothers Program (AIM) are not open to
public inspection until one year after the contract has been
executed, and the portion of the contract containing the rates
of payment are not open until three years after the contract
has been open to public inspection.
In 2004, the Legislature passed and the Governor signed SB 1103.
SB 1103 requires the LAO access to hospital and certain
managed care contracts negotiated by the California Medical
Assistance Commission for the Medi-Cal program. SB 1103
requires the LOA to maintain the confidentiality of the
contracts and contract amendments until the contract or
amendment is fully open to inspection by the public. The LAO
serves as the "eyes and ears" for the Legislature to ensure
that the executive branch is implementing legislative policy
in a cost efficient and effective manner, and by reviewing and
analyzing the operations and finances of state government.
3)Policy considerations . Arguments in support. According to
the author's office, MRMIB currently enters into contracts
with 41 health, dental, and vision plans in the Healthy
Families Program, four contracts with health plans in the
MRMIP and seven contracts with health plans in the AIM
program. The Governor's 2005-06 budget projects spending for
Healthy Families Program to be approximately $328 million from
the General Fund. Granting the LAO early access to these
contracts will better enable the LAO to assess the operation
of these programs and would further legislative oversight of
these vitally important programs.
4)Related legislation . SB 1103 (Committee on Budget and Fiscal
Review, Chapter 228, Statutes of 2004) provides, among other
things, LAO to be given access to hospital and certain managed
care contracts negotiated by the California Medical Assistance
Commission for the Medi-Cal program.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 794
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None on file.
Oppose
None on file.
Analysis Prepared by : Chris Lindstrom / G. O. / (916)
319-2531