BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1296|
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THIRD READING
Bill No: AB 1296
Author: Torrico (D)
Amended: 7/12/07 in Senate
Vote: 21
SENATE PUBLIC EMP. & RET. COMMITTEE : 3-2, 6/25/07
AYES: Wiggins, Migden, Negrete McLeod
NOES: Ashburn, McClintock
SENATE JUDICIARY COMMITTEE : 4-1, 7/10/07
AYES: Corbett, Harman, Kuehl, Steinberg
NOES: Ackerman
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 70-1, 6/4/07 - See last page for vote
SUBJECT : Public employee health benefits: disclosures
SOURCE : Public Employees Retirement System
DIGEST : This bill requires that a health benefit plan or
contract, or an entity offering services relating to the
administration of health benefit plans to Public Employees'
Retirement System (PERS) members and annuitants, disclose
to the PERS Board and staff the cost, utilization, actual
claim payments, and contract allowance amounts for health
care services rendered by participating hospitals to each
member and annuitant.
CONTINUED
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ANALYSIS : Existing law requires the PERS Board, pursuant
to the Public Employees' Medical and Hospital Care Act, to
adopt all necessary rules and regulations to establish the
scope and content of health benefit plans for public
employees and annuitants, and reasonable minimum standards
for health benefit plans.
Existing law authorizes the PERS Board to enter into
contracts with carriers offering health benefit plans,
specifies certain criteria the board may take into account
with respect to a plan, and allows the board to require
specified documents from the plan.
Existing federal law, the Health Insurance Portability and
Accountability Act of 1996 (HIPAA) specifies, among other
things, minimum privacy protections for patients' personal
medical information, including "Standards for Privacy of
Individually Identifiable Health Information" (Privacy
Rule). The Privacy Rule provides, among other things, that
protected health information, as defined, may not be used
or disclosed, except as specified.
This bill:
1. Requires that a health benefit plan or contract, or an
entity offering services relating to the administration
of health benefit plans to members and annuitants,
disclose to the board and staff the cost, utilization,
actual claim payments, and contract allowance amounts
for health care services rendered by participating
hospitals to each member and annuitant.
2. Provides that the above information would be deemed
confidential information and protected in accordance
with the federal HIPAA (42 U.S.C. Section 300gg), the
final regulations issued pursuant to the Act by the
United States Department of Health and Human Services
(45 C.F.R. Parts 160 and 164), and the Confidentiality
of Medical Information Act. This bill provides that
information provided to the Board and staff shall not
include individual member or annuitant identifying
information.
3. Provides that the Board shall not disclose the
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above-specified information in either individual or
aggregated form to any other health care service plan or
insurer or any entity offering services relating to the
administration of health benefit plans, and shall not
make this information available to the public,
including, but not limited to, any summaries,
compilations, or rankings derived from this information.
This bill provides that the information will be used
only to make decisions that materially affect the
members and annuitants of the health benefits plan
established by the Board.
4. Provides that the information specified above, in either
individual or aggregate form, shall be exempt from the
California Public Records Act.
5. Provides that, upon request from a hospital, the Board
shall provide, on an annual basis, the hospital a
reasonable opportunity to validate the data that has
been provided to the board by a health insurer, health
care service plan, or other entity pursuant to this
bill's provisions.
6. Defines "actual claim payment" to mean the actual amount
paid by the health care plan or administrator to the
participating hospital for a health care service
rendered to a member or annuitant, exclusive of member
or annuitant cost sharing and any other payment
adjustments.
7. Defines "contract allowance amounts" to mean the
negotiated rate that the participating hospital agrees
to accept as payment for a health care service rendered
to a member or annuitant under the provider agreement
between the health plan or administrator and the
participating hospital.
8. Defines "cost" to mean the full amount billed by the
participating hospital for a health care service
rendered to a member or annuitant.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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SUPPORT : (Verified 8/21/07)
Public Employees' Retirement System (source)
American Federation of State, County and Municipal
Employees, AFL-CIO
Blue Shield of California
California Labor Federation, AFL-CIO
California Professional Firefighters
California School Employees Association
California State Employees Association
Independent Employees of Merced County
Organization of SMUD Employees
Professional Engineers in California Government
Riverside Sheriffs' Association
San Bernardino Public Employees Association
San Diego County Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
Service Employees International Union
State Treasurer Bill Lockyer
OPPOSITION : (Verified 8/21/07)
California Hospital Association
ARGUMENTS IN SUPPORT : The bill's sponsor writes:
"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 third largest purchaser of employee
health benefits in the nation, CalPERS' health program
will spend $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 five years, premiums for the 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 California
taxpayers to make fully informed decisions during rate
negotiations.
"However, many hospitals prohibit contracting health
plans from disclosing to CalPERS the actual rate
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hospitals are paid, thereby preventing CalPERS from
validating relevant information needed to negotiate the
best rate for its members.
"This bill would allow CalPERS to obtain the necessary
information that would 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. As a result, the Board will be in a
better position to negotiate the best rates possible for
its employees and members. Additionally, the information
will be aggregated in compliance with the Health
Insurance Portability and Accountability Act of 1996
(HIPPA) [sic] and held proprietary by CalPERS."
ARGUMENTS IN OPPOSITION : Opponent, the California
Hospital Association (CHA), objects to one subdivision of
this bill (f), as amended, which provides that upon request
from a hospital, the Board shall provide the hospital, on
an annual basis, a reasonable opportunity to validate the
data that has been provided to the Board by a health
insurer, health care service plan, or other defined entity.
CHA argues that the better approach would be to have each
participating hospital and the health plan to agree on a
standard reporting format prior to submission of the data
to the Board, and, if there is not agreement on the format
or the information to be submitted, the participating
hospital can register its objections to the Board and have
them considered.
ASSEMBLY FLOOR :
AYES: Anderson, Arambula, Bass, Beall, Benoit, Berg,
Berryhill, Blakeslee, Brownley, Caballero, Charles
Calderon, Carter, Cook, Coto, Davis, De La Torre, De
Leon, DeSaulnier, DeVore, Duvall, Dymally, Emmerson, Eng,
Evans, Feuer, Fuentes, Fuller, Gaines, Galgiani, Garcia,
Garrick, Hancock, Hayashi, Hernandez, Horton, Houston,
Huff, Huffman, Jones, Karnette, Krekorian, La Malfa,
Laird, Leno, Levine, Lieber, Lieu, Ma, Maze, Mendoza,
Mullin, Nava, Niello, Parra, Portantino, Price,
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Richardson, Sharon Runner, Ruskin, Salas, Saldana, Silva,
Solorio, Spitzer, Swanson, Torrico, Tran, Villines, Wolk,
Nunez
NOES: Adams
NO VOTE RECORDED: Aghazarian, Jeffries, Keene, Nakanishi,
Plescia, Smyth, Soto, Strickland, Walters
JJA:mw 8/21/07 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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