BILL ANALYSIS
AB 1296
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Date of Hearing: April 18, 2007
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Ed Hernandez, O.D., Chair
AB 1296 (Torrico) - As Amended: April 9, 2007
SUBJECT : Public employee health benefits: disclosures.
SUMMARY : Requires health benefit plans providing services
under the Public Employees' Medical and Hospital Care Act
(PEMHCA) to provide the California Public Employees' Retirement
System (CalPERS) with claims payment data for each member, and
contract payment amounts for services billed for each individual
health care provider. Specifically, this bill :
1)Requires a health benefit plan or contract, or an entity
offering health benefit plan administration services under
PEMHCA, to disclose to CalPERS the cost, utilization, and
actual provide claim payments at an individual level for
services rendered, including the provider contract allowance
amounts.
2)Specifies that the information provided will be deemed
confidential and protected in accordance with the federal
Health Insurance Portability and Accountability Act (HIPPA) of
1996, and requires the information to be provided in a manner
that does not include individual member or annuitant
identifying information.
3)Specifies the information provided will be deemed confidential
trade secret information, will not be made available to the
public, and is exempt from disclosure under the California
Public Records Act.
FISCAL EFFECT : Unknown
COMMENTS : According to the sponsor, CalPERS, "Current law does
not allow CalPERS to obtain claims payment information between
health plans and the hospitals and physicians that provide care
to CalPERS members. As the nation's third largest purchaser of
employee health benefits, CalPERS will spend approximately $4.9
billion in 2007 to purchase health benefits to cover 1.2 million
active and retired state and local government public employees
and their families. Over the last 5 years, premiums for the
AB 1296
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Basic HMO plans have increased by 101 percent and Basic PPO
plans have increased by 78 percent. As such, the CalPERS Board
has a responsibility to its members and the California taxpayers
to make fully informed decisions during rate negotiations."
CalPERS goes on to state, "The ability to obtain actual provider
claims payment information will place CalPERS in a better
position to negotiate the best rates with contracting health
plans. The Bureau of State Audits (BSA) further validated this
point in an audit conducted in 2004, which concluded that, 'the
Legislature should consider enacting legislation that would
allow CalPERS, during its contract negotiation process, to
obtain relevant documentation supporting any analyses it will
use to make decisions that materially affect the members of the
health benefits program.' Consistent with the BSA's
recommendation, AB 1296 would allow CalPERS to obtain the
necessary information to enable staff to more effectively
analyze benefit plan designs, validate the true cost of health
care, and reliably determine health program effectiveness during
the health plan annual rate negotiation process. If the Board
is able to use this information to lower rates by as little as
percent, it would equate to a savings of $24.5 million to
members and employers."
Supporters state, "The skyrocketing cost of health care has
become a growing problem for employees, employers and retirees.
One way to control costs is to improve data collection and
evaluate data to insure that charges are appropriate and fair.
CalPERS is the second largest purchaser of health care in the
United States, yet still is hindered in the collection of data.
Health care providers claim confidentiality or otherwise refuse
to provide the data needed to adequately evaluate health care
costs and insure cost containment. AB 1296 would protect the
confidentiality of date, but still allow CalPERS access to data
in order to properly represent employers and employees and
provide quality care at a fair rate."
The Committee is informed that the author will be offering
amendments in Committee to delete individual physicians from the
bill's reporting requirements.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 1296
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California Public Employees' Retirement System (Sponsor)
American Federation of State, County and Municipal Employees
Blue Shield of California
California School Employees Association
California School Employees Association
California State Employees Association
Independent Employees of Merced County
Organization of SMUD Employees
Professional Engineers in California Government
Riverside Sheriff's Association
San Bernardino Public Employees Association
San Diego County Court Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
Service Employees International Union
Service Employees International Union, Local 1000
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957