BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 278|
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THIRD READING
Bill No: AB 278
Author: Monning (D)
Amended: 8/17/10 in Senate
Vote: 21
SENATE HEALTH COMMITTEE : 6-2, 6/30/10
AYES: Alquist, Cedillo, Leno, Negrete McLeod, Pavley,
Romero
NOES: Strickland, Aanestad
NO VOTE RECORDED: Cox
SENATE APPROPRIATIONS COMMITTEE : 7-4, 8/12/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Ashburn, Emmerson, Walters, Wyland
ASSEMBLY FLOOR : Not available
SUBJECT : Health information exchange: demonstration
projects
SOURCE : Author
DIGEST : This bill permits the California Office of
Health Information Integrity to establish and administer up
to four demonstration projects annually to evaluate
potential solutions to facilitate health information
exchange that promote quality of care, respect the privacy
of personal health information, and enhance the trust of
stakeholders.
CONTINUED
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ANALYSIS : Existing federal law establishes the Health
Information Technology for Economic and Clinical Health Act
(HITECH Act), within the federal American Recovery and
Reinvestment Act of 2009 (ARRA), to, among other things,
provide funding related to health information technology
(HIT) and HIE, including funding to states to establish HIE
and to local communities to conduct health information
exchange demonstration projects.
Existing state law:
1. Establishes CalOHII within the California Health and
Human Services Agency (Agency) to ensure enforcement of
state law mandating confidentiality of medical
information, and to impose administrative fines for the
unauthorized use of medical information.
2. Authorizes the Agency, or one of the departments under
its jurisdiction, to apply for federal funds made
available through ARRA for health information technology
and exchange.
3. Requires Agency or a state-designated entity to
facilitate and expand the use of electronic health
information according to nationally recognized standards
and specifications, and execute tasks related to
accessing ARRA funds while protecting the privacy and
confidentiality of medical records to the greatest
extent possible.
This bill:
1. Authorizes the Agency, through CalOHII, to establish and
administer demonstration projects, as defined, to
evaluate potential solutions to facilitate HIE that
promote quality of care, respect the privacy and
security of personal health information, and enhance the
trust of the stakeholders.
2. Defines "demonstration project" as a project approved
and administered by CalOHII in accordance to this
division and the State Cooperative Grant Agreement for
health information exchange, or any other similar grant
or grants.
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3. Defines "State Cooperative Agreement" as the grant
agreement between the federal government and the state,
in which the federal government awarded the state with
grant money pursuant to the HITECH Act in February 2010.
4. Authorizes health care entities, as defined, to submit
an application to CalOHII to be approved as a
demonstration project participant, as defined.
5. Defines "Governmental authority" to mean any municipal,
county, state, or other governmental entity that has
jurisdiction and control over the provision of, or
payment for, medical services or that routinely receives
medical information to complete its designated
governmental function.
6. Defines "demonstration project participant" as a
California-based health care entity that is approved by
CalOHII to participate in a demonstration project.
7. Requires CalOHII, upon receiving a demonstration project
application, to:
A. Assist applicants in soliciting federal funds for
the demonstration project.
B. Work with applicants to define the scope of the
demonstration project.
8. Authorizes the Director of CalOHII to approve
demonstration projects to test for, but not limited to,
the following areas:
A. Policies and practices related to patient
consent, information, and notification.
B. New technologies and applications that enable the
transmission of protected health information, as
specified.
C. Implementation issues, if any, encountered by
small solo health care providers as a result of
exchanging electronic health information.
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9. Requires that the selection of demonstration projects be
based on, but not limited to, the following criteria:
A. Areas critical to building consumer trust and
confidence in the HIE system.
B. Projects that help support the exchange of
information critical to meeting the federal
meaningful use provisions, as defined.
C. Areas recommended by the California HIE consumer
and industry stakeholder advisory process.
10.Defines "meaningful use" to mean the term as defined in
the HITECH Act, and in regulations promulgated under the
HITECH Act.
11.Requires CalOHII to engage with stakeholders to evaluate
issues identified by the demonstration projects, comment
upon proposed regulations, and discuss HIE solutions.
12.Authorizes CalOHII to administer up to four
demonstration projects a year.
13.Requires CalOHII to work collaboratively with approved
demonstration project participants to identify a set of
common data elements that will be used to collect,
analyze, and measure performance.
14.Authorizes the Director of CalOHII to adopt regulations
to ensure all approved HIE service participants, as
defined, and demonstration project participants follow
rules, and work within parameters, as defined by the
office, that are consistent for the exchange of
information.
15.Defines "health information exchange service
participants" as a health care entity that has
voluntarily agreed to use the HIE services developed in
accordance with this bill.
16.Exempts adoption of, and changes to, such regulations
from provisions in existing law related to procedures
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for public participation, the review of proposed
regulations by the Office of Administrative Law, and
filing and publication requirements that specify an
effective date that is 30 days after the date of filing
with the Secretary of State.
17.Requires the Director of CalOHII to file any regulation
adopted pursuant to this bill with the Office of
Administrative Law, for filing with the Secretary of
State and publication in the California Code of
Regulations. Requires such filings to cite the
appropriate section of this bill and any other
applicable state or federal laws.
18.Requires CalOHII, prior to adopting a regulation or
changing an existing regulation pursuant to this bill,
to adopt the standards requiring CalOHII to:
A. Post the proposed regulation on its website at
least 45 days prior to adoption.
B. Accept public comments for at least 30 days after
the proposed regulation has been posted online.
C. Hold a hearing prior to adoption of the
regulation if a member of the public requests a
public hearing during the 30-day review period.
19.Specifies that any regulation adopted shall become
effective on the date it is filed with the Secretary of
State unless the director prescribes a later date in the
regulation, or in a written instrument filed with the
regulation.
20.Requires regulations adopted to expire upon repeal of
the authorizing statute.
21.Requires CalOHII to receive reports from demonstration
project participants on the outcome of the demonstration
project no later than 60 days after the end of the
project.
22.Requires CalOHII to review the results of the
demonstration projects and report to the Joint
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Legislative Budget Committee, the Senate Committee on
Appropriations, the Senate Committee on Budget and
Fiscal Review, the Senate Committee on Health, the
Assembly Committee on Appropriations, the Assembly
Committee on Budget, and the Assembly Committee on
Health, within six months after the end of the project.
23.Specifies that demonstration projects carried out
utilizing federal grant funds may be subject to federal
auditing requirements.
24.Requires costs associated with the support, assistance
and evaluation of approved demonstration projects to be
funded exclusively by federal funds or other non-General
Fund sources.
25.Repeals the provisions of the bill on the date the
Director of CalOHII executes a declaration stating that
the grant period for the State Cooperative Grant
Agreement for HIE has ended.
26.Makes various legislative findings and declarations.
Background
Health information exchange . Realizing the benefits of HIT
requires a pervasive underlying infrastructure that
supports the use of patient-focused electronic health
information. This requires wide-scale systemic, state and
nationwide infrastructure that incorporates protections for
patient privacy and confidentiality. The building blocks
for this infrastructure include electronic medical records
(EMRs) used by providers to manage patient information,
personal health records for individual access of their own
records, and health information exchange (HIE) to
facilitate the electronic exchange of EMRs and personal
health records.
HIE is the capability to electronically move health
information among disparate health care information systems
while maintaining the meaning of the information being
exchanged. In many instances, HIE is used to describe both
the process of exchanging health information
electronically, and the entity overseeing and governing the
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exchange. The goal of HIE is to facilitate access to, and
retrieval of, clinical data to provide safer, more timely,
efficient, effective, equitable, patient-centered care.
HIE Readiness and Extent of HIE Adoption in California .
According to Agency's HIE strategic plan, health care
services are delivered to Californians through 400
hospitals, over 60,000 active physicians, 100 federally
qualified health centers and 263 rural health clinics.
Nationally, it is estimated that only 7.6 percent of
non-federal hospitals and 13 percent of ambulatory
providers have implemented "basic" EMRs that include
certain clinical documentation, but not clinical decision
support. California providers rank above the national
estimate with 20 percent of medical groups and 13 percent
of physician groups estimated to be using EMRs. Similarly,
among individual physicians, California physicians reported
greater use of EMRs than the national average, with 37
percent of physicians reporting EMR use in comparison to 28
percent nationally. This uptake may, in part, be explained
by the presence of large medical practices (10 or more
physicians) in California, as 57 percent of physicians in
large practices report using EMRs, compared to 25 percent
of physicians in small/medium practices and 13 percent of
solo practitioners. However, two-thirds of physicians work
in small and solo practices. Virtually all Kaiser
Permanente physicians now use EMRs.
California's health care safety-net facilities and
providers in underserved communities generally face
significant fiscal and resource challenges, and these
challenges impact their ability to implement EMRs. While
less than a third of community clinics report they are
actively pursuing EMRs, the majority of community clinics
have some form of health IT in place, most commonly in the
form of diabetes and immunization registries.
California's current HIE efforts fall broadly into two
categories: 1) large health systems, affiliated providers
and ancillary services implementing integrated EMRs, and,
2) community-driven efforts that aim to ensure ubiquitous
availability of data within a region or across the state.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
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Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Demonstration project $360 $360 $360 Special*
procurement, administration,
and oversight
* California Health Information Technology and Exchange
Fund (federal HITECH funds)
SUPPORT : (Verified 8/16/10)
California Office of Health Information Integrity
ARGUMENTS IN SUPPORT : The California Office of Health
Information Integrity writes in support, stating that this
bill would test policies and rules, and better inform the
state and health care stakeholders while they attempt to
define HIE infrastructure over the next several years. By
allowing for various HIE demonstration projects, it would
be possible to determine how best to protect privacy in
accordance with state and federal laws, while enabling
electronic health information exchange.
CTW:nl 8/17/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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