BILL ANALYSIS
AB 1296
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1296 (Torrico)
As Amended August 30, 2007
Majority vote
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|ASSEMBLY: |70-1 |(June 4, 2007) |SENATE: |22-13|(September 5, |
| | | | | |2007) |
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Original Committee Reference: P.E.,R.& S.S.
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 rendered by hospitals.
Specifically, this bill :
1)Requires a health benefit plan or contractor, or an entity
offering health benefit plan administration services under
PEMHCA, to disclose to CalPERS staff, and any contractor or
consultant of they system, the cost, utilization, and actual
claim payments at an individual level for health care services
rendered by hospitals, including the 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.
4)Defines the terms "actual claim payment", "contract allowance
amounts" and "cost" for purposes of this bill.
The Senate amendments :
1)Specifically allow the information to be disclosed to a
AB 1296
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contractor or consultant of CalPERS and subjects those
contractors and consultants to the same confidentiality and
nondisclosure restrictions imposed by this bill on CalPERS.
2)Make other technical, clarifying changes.
AS PASSED BY THE ASSEMBLY, this bill was substantially similar
to the version approved by the Senate.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, no added administrative costs to CalPERS and
potential savings, to the extent that additional claims
information enables CalPERS to negotiate lower health insurance
rates.
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
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
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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."
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0002961