BILL ANALYSIS
AB 598
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Date of Hearing: April 28, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 598 (De La Torre) - As Amended: April 22, 2009
SUBJECT : California Health Information Network.
SUMMARY : Establishes within the California Health and Human
Services Agency (CHHSA), the California Health Information
Network (CHIN) to review and, after public hearings for the
purpose of receiving input from all interested parties,
recommend adoption of health information exchange standards to
the Governor and the Legislature, and the California Health
Information Standards Advisory Board, with specified duties and
membership. Specifically, this bill :
1)Establishes within CHHSA the CHIN to review and, after public
hearings for the purpose of receiving input from all
interested parties, recommend adoption of health information
exchange (HIE) standards to the Governor and the Legislature.
2)Establishes the goals of the CHIN as follows:
a) Establishment and maintenance of an electronic,
value-added network to link the health care community
participants in the state for the purpose of interchanging
important financial and clinical information;
b) Standardization of health care transactions, health care
reporting, electronic interface development, and health
care communications services;
c) Gathering and providing data to a statewide data
repository;
d) Conducting educational programs consistent with the
purposes of this division;
e) Providing charitable services that lessen the burdens of
government by providing data to help state agencies fulfill
their responsibilities as legislatively mandated;
f) Developing capabilities for standards-based, secure data
exchange in compliance with federal standards;
g) Improving the coordination of health care information
among hospitals, laboratories, physicians' offices,
pharmacies, and other health care providers;
h) Ensuring appropriate information is available at the
time and place of care;
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i) Ensuring that consumers' health information is secure
and confidential;
j) Providing consumers with access to their health
information from electronic health records and other
sources, and providing new capabilities for consumers to
manage and control their personal health records;
aa) Supporting the delivery of appropriate evidence-based
medical care and reducing the risks associated with medical
errors; and,
bb) Lowering health care costs resulting from
inefficiencies, medical errors, and incomplete patient
information.
3)Establishes within CHHSA the California Health Information
Standards Advisory Board with specified membership, as
follows:
a) The Department of Finance;
b) The Department of Insurance;
c) The Department of Managed Health Care;
d) The Office of Health Information Integrity (OHII);
e) The California Association of Health Plans;
f) The California Association of Physician Groups;
g) The California Hospital Association; and,
h) The California Medical Association.
4)Requires the Secretary of CHHSA to report annually to the
Governor and the Legislature on its progress in implementing
this division, including but not limited to, recommended
statutory changes necessary to accomplish the goals for HIE
established in this bill.
EXISTING LAW :
1)Establishes OHII within CHHSA to ensure the enforcement of
state confidentiality of medical information, and to impose
administrative fines for the unauthorized use of medical
information upon referral from the Department of Public Health
(DPH).
2)Establishes within state and federal law specific requirements
imposed on health care providers, health plans and similar
entities related to the protection and the confidentiality of
patient medical and health information, including the
California Confidentiality of Medical Information Act, the
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California Insurance Information and Privacy Protection Act
and the federal Health Insurance Portability and
Accountability Act (HIPAA).
3)Under the federal Health Information Technology for Economic
and Clinical Health (HITECH) Act, enacted as part of the
federal American Recovery and Reinvestment Act of 2009,
establishes within the federal Department of Health and Human
Services (DHHS) the Office of the National Coordinator for
Health Information Technology and requires the Secretary of
DHHS to adopt an initial set of standards for health
information technology (HIT) and HIE, as specified, by
December 31, 2009. HITECH also makes changes to HIPAA privacy
standards and enforcement, and establishes grants and
incentives for states and health care providers to adopt and
implement HIT.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill will
reduce health care costs by creating efficiencies in financial
and clinical transactions within the health care community.
The author indicates that this bill is modeled after Utah and
Delaware, and contends that CHIN will reduce health care costs
by simplifying medical billing, which costs $10 billion in the
state annually. The author states that developing
streamlined, uniform billing forms, coding systems, and
procedures will also help improve patient care and reports
that a recent study found that doctors may spend up to 45
minutes on billing for every hour of care they provide.
According to the author, the groundbreaking Utah program has
reduced claims processing costs by half.
2)BACKGROUND . The federal HITECH Act provides more than $36
billion to promote HIT/HIE, including grants and incentive
payments for adoption of electronic health records, chronic
disease management systems, and other health-related
technologies. According to a February 2009 policy brief
prepared by the California HealthCare Foundation, "An
Unprecedented Opportunity: Using Federal Stimulus Funds to
Advance Health IT in California," the HITECH Act sets forth a
framework for development of federal policy and the
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expenditure of federal stimulus money to advance the design,
development and operation of a nationwide HIT infrastructure
that allows for the electronic use and exchange of
information, and strengthens the privacy and security
provisions of HIPAA. The goal of HITECH is to ensure that
every person in the U.S. has an electronic health record by
2014.
3)STATE IMPLEMENTATION . On April 22, 2009, CHHSA released a
preliminary state plan related to the HIT/HIE elements of
federal stimulus, entitled "Health Information Exchange:
California's High Level Plan to Secure Federal Stimulus
Support." The CHHSA plan calls for a rapid four month process
to convene and gather input from relevant stakeholders;
conduct an assessment on existing HIE infrastructure and
projects in the state; analyze and develop success criteria,
elements of governance, and technical and business
requirements related to the advancement of HIE; and, the
possibility of a state-issued request for proposal to secure
and establish a non-profit, state-designated entity to serve
as the lead agency in California regarding HIT/HIE as
authorized under the HITECH Act. CHHSA recently appointed a
new Deputy Secretary for HIT and a HIE Advisory Board composed
of representatives of the Legislature and relevant state
agencies, provider, consumer, and business stakeholder
organizations.
4)RELATED LEGISLATION .
a) AB 1011 (Jones) will require OHII to report to the
Legislature, as specified, on the impact of federal law
changes related to health care technology and the privacy
of health and medical information, including state law
changes necessary and appropriate to conform state law to
federal changes. AB 1011 is scheduled to be heard in the
Assembly Health Committee on April 28, 2009.
b) SB 270 (Alquist), pending in the Senate, will establish
the Health Information Technology Advisory Panel, with
specified membership, to advise the Governor and the
Legislature on HIT implementation.
5)PREVIOUS LEGISLATION .
a) AB 211 (Jones), Chapter 602, Statutes of 2008
establishes OHII to ensure the enforcement of state
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confidentiality of medical information, to impose
administrative fines for the unauthorized use of medical
information upon referral from DPH, and requires providers
of health care to establish and implement appropriate
administrative, technical, and physical safeguards to
protect the privacy of patient medical information.
b) SB 541 (Alquist), Chapter 605, Statutes of 2008
increases the maximum penalties levied against hospitals
for immediate jeopardy and other specified violations.
Requires licensed clinics, health facilities, hospices, and
home health agencies to prevent unlawful access to, use, or
disclosure of patients' medical information; establishes
administrative penalties for violations; and, requires the
patient and DPH to be notified of any unlawful access to,
use, or disclosure of a patient's medical information.
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6)POLICY QUESTIONS .
a) Duplicative advisory board ? The CHHSA just announced
the establishment of a HIE Advisory Board, with different
membership than the Advisory Board established in this
bill, to provide advice and input to the Secretary relating
to HIE. The author may wish to specify the duties and
responsibilities of the Advisory Board in this bill if it
is intended to have a different function and purpose.
b) Advisory Board Membership . The California Health
Information Standards Advisory Board established by this
bill includes a limited membership that does not, for
example, include the health care purchasing community, such
as labor and business groups, or any consumer
representatives, and excludes other provider organizations
now included on the HIE Advisory Board established by
CHHSA, such as primary care clinics and pharmacists. The
author may wish to amend the composition of this advisory
board to more fully reflect the broad array of interests,
perspectives and expertise that will be needed to
successfully develop and promote the implementation of HIE
standards.
c) Report and Recommendations . This bill requires the
Secretary of CHHSA to report to the Governor and the
Legislature and make recommendations on ways to accomplish
a number of statewide goals related to HIE. However, the
only report required is an annual progress report by the
Secretary of CHHSA. The author may wish to establish a
date certain for an initial report in order to ensure
implementation of a timely process by CHHSA.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Deborah Kelch / HEALTH / (916) 319-2097
AB 598
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