BILL ANALYSIS
AB 1296
Page 1
Date of Hearing: May 9, 2007
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mark Leno, Chair
AB 1296 (Torrico) - As Amended: April 19, 2007
Policy Committee: P.E.R. &
S.S.Vote: 5-0
Judiciary 10-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires health benefit plans providing services
administered by the California Public Employees' Retirement
System (CalPERS) to provide CalPERS with claims payment data for
each member, and contract payment amounts for services rendered
by hospitals. The bill specifically requires:
1)A health care benefit plan or contract under the Public
Employees' Medical and Hospital Care Act (PEMHCA) to disclose
to CalPERS the cost, utilization, and actual claim payments at
an individual level for health care services rendered by
hospitals, 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 information to be provided in a way that
does not identify the member.
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
1)No added administrative costs to CalPERS.
2)Potential state savings, to the extent that additional claims
information enables CalPERS to negotiate lower health
AB 1296
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insurance rates.
COMMENTS
Rationale . The sponsor (CalPERS) points out that the costs of
providing health care to their members has soared in recent
years. Over the past five years, basic HMO plans have increased
by 101% and Basic PPO plans have increased by 78%. CalPERS
argues that actual provider claims payment information will
place them in a better position to negotiate the best rates with
contracting health plans.
This bill is consistent with a March 2005 recommendation made by
the California Bureau of State Audits as part of its evaluation
of a CalPERS board decision to approve an exclusive provider
network for CalPERS members in Blue Shield of California. In
that report, BSA recommended that the Legislature 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
established by the PEMHCA.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081