BILL ANALYSIS
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Elaine K. Alquist, Chair
BILL NO: AB 952
A
AUTHOR: Krekorian
B
AMENDED: May 19, 2009
HEARING DATE: July 8, 2009
REFERRAL: Judiciary
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CONSULTANT:
5
Bain/
2
SUBJECT
Health information: disclosure: Taft-Hartley plans
SUMMARY
This bill would authorize a health care provider or a
health care service plan (health plan) to disclose medical
information to an employee welfare benefit plan formed
under the federal Taft-Hartley Act, if the disclosure is
for determining eligibility, coordination of benefits, or
to allow the employee welfare benefit plan to advocate on
behalf of a patient or enrollee with specified entities,
and if the request is accompanied by a written
authorization for the release of the information from the
patient or other authorized person, and the disclosure is
allowed by and made in a manner consistent with federal
privacy requirements.
CHANGES TO EXISTING LAW
Existing federal law:
Existing federal law prohibits, under federal regulations
implementing the Health Insurance Portability and
Accountability Act (HIPAA), "covered entities" from using
or disclosing protected health information, with
exceptions. Existing federal regulations define "covered
Continued---
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entities" to include health plans, health care
clearinghouses, and health care providers that transmit any
health information in electronic form. Existing federal
regulations define a "health plan" to include a group
health plan, and an employee welfare benefit plan or any
other arrangement that is established or maintained for the
purpose of offering or providing health benefits to the
employees of two or more employers.
Existing federal law, the Taft-Hartley Act, defines an
"employee welfare benefit plan" as any plan, fund, or
program which is established or maintained by an employer
or by an employee organization, or by both, for the purpose
of providing for its participants or their beneficiaries
medical insurance or other specified employee benefits.
Employers can make payments to a trust fund under specified
circumstances, such as if the trust fund is established for
the sole and exclusive benefit of the employees, and
employees are equally represented in the administration of
the fund.
Existing state law:
Existing law prohibits, under the state Confidentiality of
Medical Information Act (CMIA), a health care provider,
health plan or contractor (a medical group, pharmaceutical
benefits manager, or medical service organization) from
disclosing medical information regarding a patient of the
health care provider or a health plan enrollee without
first obtaining an authorization from the patient, his or
her legal representative or other specified persons. CMIA
defines a health care service plan (health plan) as any
entity regulated pursuant to the Knox-Keene Health Care
Service Plan Act of 1975.
Existing law contains exceptions from this prohibition that
either require the release of medical information, or
permit the release of medical information. For example,
existing law requires a health care provider, a health
plan, or a contractor to disclose medical information if
the disclosure is compelled, such as pursuant to a court
order, by a search warrant issued to a governmental law
enforcement agency, or to patient or his or her
representative. Existing law permits health care providers
or health plans to release medical information to health
care providers, health plans, or contractors for the
STAFF ANALYSIS OF ASSEMBLY BILL 952 (Krekorian) Page
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purpose of diagnosis or treatment of the patient, or to
payors to the extent necessary to allow responsibility for
payment to be determined and payment to be made.
Existing law (the Knox-Keene Health Care Service Plan Act
of 1975) prohibits a health plan from releasing any
information that would indicate to an employer that an
employee is receiving or has received services from a
health care provider covered by the plan, unless authorized
to do so by the employee.
This bill:
This bill permits medical information to be disclosed by a
health care provider or a health plan to an employee
welfare benefit plan, as defined under the federal Employee
Retirement Income Security Act of 1974, which provides
medical care and which is formed under the federal
Taft-Hartley Act, or to an entity contracting with the plan
for administrative and management services, if all of the
following conditions are met:
The disclosure is for the purpose of determining
eligibility, coordination of benefits, or to allow the
employee welfare benefit plan, or the contracting entity,
to advocate on the behalf of a patient or enrollee with a
health care provider, a health plan, or a state or
federal regulatory agency.
The request for the information is accompanied by a
written authorization for the release of the information
submitted by the patient, the legal representative of the
patient (if the patient is a minor or an incompetent),
the spouse of the patient or the person financially
responsible for the patient under specified
circumstances, or the beneficiary or personal
representative of a deceased patient.
The disclosure is authorized by and made in a manner
consistent with the Health Insurance Portability and
Accountability Act of 1996 (HIPAA).
Any information disclosed is not further used or
disclosed by the recipient in any way that would directly
or indirectly violate CMIA or the restrictions imposed by
federal HIPAA regulations on privacy, including the
STAFF ANALYSIS OF ASSEMBLY BILL 952 (Krekorian) Page
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manipulation of the information in any way that might
reveal individually identifiable medical information.
This bill would allow a health plan to release medical
information under this bill, notwithstanding an existing
law provision that prohibits a health plan from releasing
any information to an employer that would directly or
indirectly indicate to the employer that an employee is
receiving or has received services from a health care
provider covered by the plan, unless authorized to do so by
the employee.
FISCAL IMPACT
According to the Assembly Appropriations Committee, no
direct fiscal impact is created by this bill, which
clarifies California medical privacy laws to authorize
access to summary health information allowed by federal law
for specified health plans.
BACKGROUND AND DISCUSSION
According to the author, California has some of the most
strict and effective patient privacy regulations for health
plans, which contain intentionally greater protections than
are provided by federal privacy law (HIPAA). The author
states federal privacy regulations give deference to more
strict state law, which has resulted in a uniquely
structured class of health plans -- ERISA Taft-Hartley
Trusts regulated by the federal Department of Labor --
being unduly burdened by a quirk in state law. The author
states the unfortunate quirk in state law is that CMIA does
not r ecognize a Taft- Hartley plan as a health care service
plan, and health care providers, in the absence of state
law regarding Taft-Hartley plans, are imposing requirements
for sharing protected information that are even more
stringent than state law. The author states this bill will
allow Taft-Hartley plans to receive medical information in
a manner consistent with and authorized by HIPAA, while
maintaining all provisions of California law including the
more strict patient privacy regulations for health plans.
The author argues if this information is not allowed to be
shared with Taft-Hartley plans, consistent with HIPAA and
CMIA, the plan will not know whether it is paying health
care providers for the appropriate benefits, for the right
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patients, and at the appropriate level of compensation.
The author concludes by stating this bill will not allow
for health care providers governed by the stricter CMIA to
share any data than is currently allowed under CMIA, but
allows Taft-Hartley plans to more efficiently perform their
functions.
Background on privacy law
The privacy of patients' personal medical information is
regulated by both state (CMIA) and federal law (privacy
regulations implemented under HIPAA). Both generally
prohibit the disclosure of a patient's personal health
information without the prior written consent of the
patient, but both also carve out exemptions that either
require or permit the sharing of personal health
information. Among other provisions, CMIA permits the
disclosure of medical information to health care providers,
health plans or contractors for purposes of diagnosis or
treatment, and to an insurer, employer, health plan,
employee benefit plan, government entity or contractor or
other person to allow responsibility for payment to be
determined and made.
Federal HIPAA regulations permit a group health plan and an
employee welfare benefit plan (which are both defined as
"covered entities" in federal regulations) to disclose
protected health information to another covered entity for
specified purposes, such as the payment activities of the
entity that receives the information, for health care
operations under certain circumstances, or for the purpose
of health care fraud and abuse detection or compliance.
CMIA does not include a similar authorization that permits
a state-licensed health plan to disclose medical
information to an employee welfare benefit plan except to
allow responsibility for payment to be determined and
payment to be made and in another narrow circumstance.
This bill would add another exemption in CMIA law to allow
medical information to be disclosed from a health care
provider or a health plan to an employee welfare benefit
plan, or an entity with which it contracts. The disclosure
of medical information must be for the purpose of
determining eligibility, or coordination of benefits, or to
allow the employee welfare benefit plan to advocate on the
behalf of a patient or enrollee with a health care
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provider, a health care service plan, or a state or federal
regulatory agency. The request for the medical information
must be authorized and made in a manner consistent with
HIPAA, and be accompanied by a written authorization for
the release of the information submitted in a manner
consistent with existing law provisions requiring a signed
authorization for the release of the information by the
patient (or his or her spouse or legal representative) that
meets specified requirements.
Arguments in support
This bill is sponsored by Pacific Federal (a third-party
administrator specializing in the administration of
Taft-Hartley health plans) and supported by several labor
unions and the California Association of Joint Powers
Authorities. Pacific Federal argues this bill will conform
California medical privacy law with federal HIPAA
regulations to permit sharing of medical information by
state licensed health plans and federal Taft-Hartley health
plans and their third-party administrators, to the extent
authorized by and consistent with CMIA. Pacific Federal
argues this bill will benefit the health care coverage
provided to the three million Californians covered by
Taft-Hartley plans.
Related legislation
AB 562 (Cook) would require a health insurance issuer that
receives a written request for a written report of claim
information from a plan, plan sponsor, or plan
administrator with respect to a group health plan issued by
the issuer, to provide that report to the requesting party
no later than 30 days after receipt of the request. AB 562
would require the report to be provided in a specified
manner, and to include specified information. The bill
would prohibit the health insurance issuer from disclosing
any information protected under federal or state law. AB
562 failed passage in the Assembly Health Committee and is
a two-year bill.
PRIOR ACTIONS
Assembly Floor: 76-0
Assembly Appropriations:17-0
Assembly Judiciary: 10-0
Assembly Health: 17-0
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POSITIONS
Support: Pacific Federal (sponsor)
California Association of Joint Powers Authorities
California Conference of Machinists
California Teamsters Public Affairs Council
International Longshore and Warehouse Union
United Food & Commercial Workers Western States
Council
UNITE-HERE
Support (prior version):
Building Material, Construction, Industrial,
Professional and Technical
Teamsters Union Local #36
Employers' Health and Welfare Fund
I.A.T.S.E. Local 80
Legal Aid Foundation of Los Angeles
Liberty Dental Plan
Neighborhood Legal Services of Los Angeles County
Professional Musicians, Local 47
Teamsters Local Union No. 572
Trustees of the Public Employees Benefit Trust
(PEBT)
Trustees of the South Bay Teamsters and Employers
Health and Welfare and
Related Benefits Trust (SBT)
Trustees to the Union Heritage Trust (UHT)
Valley Industry and Commerce Association
Several individuals
Oppose: None received
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