BILL ANALYSIS
SB 337
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Date of Hearing: September 9, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
SB 337 (Alquist) - As Amended: September 4, 2009
Policy Committee: Health Vote: 13-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill addresses the authority and governance related to
health information technology funding available to California in
the American Recovery and Reinvestment Act of 2009 (ARRA-Public
Law 111-5). In addition, this bill modifies medical privacy
provisions established by SB 541 (Alquist), Chapter 605,
Statutes of 2008. Specifically, this bill:
1)Authorizes the California Health and Human Services Agency
(CHHSA) or a related department to apply for ARRA funds for
health information technology and exchange (HIT and HIE). If
funding is received, this bill establishes the California
Health Information Technology and Exchange Fund in the State
Treasury and specifies funding shall be subject to
appropriation by the Legislature.
2)Requires the governor to designate a non-profit to be the
state-designated entity (SDE) for ARRA purposes if neither
CHHSA nor a department applies for funding. Establishes
various requirements for CHHSA, a department, or the
non-profit administrator. Establishes a governing board for
the SDE under the jurisdiction of the CHHSA.
3)Includes legislative intent regarding sole funding with
federal funds, private funds, and a to-be-established
self-funded mechanism. In this context, a self-funded
mechanism could include a user fee associated with a health
information exchange.
4)Modifies violations of reporting related to medical privacy
breaches to accommodate law enforcement investigations.
SB 337
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FISCAL EFFECT
1)Nationally, $34 billion in federal ARRA funding is available
from 2011 to 2016 and is targeted as provider adoption
incentives for the use of electronic health records (EHR) in
Medi-Cal and Medicare. An additional $2 billion is available
for planning and development of state and/or regional HIE,
adoption of technology, and EHR and other loan programs.
2)California is expected to qualify for $3 billion (federal) in
provider incentives and grants from 2011 to 2016. No state
match is required in calendar year 2010. State contributions
to draw down federal funding in future years include: at least
$1 for each $10 of federal funds in 2011, $1 for each $7 of
federal funds in 2012, and $1 for each $3 in federal funding
for 2013-2016. According to stakeholders, non-GF state
contribution possibilities include support from health
technology industry groups, provider associations, or
non-profit groups. In addition, the state contribution may
also be generated via the self-funding mechanism to be
established pursuant to intent language contained in this
bill.
3)Future GF savings in Medi-Cal likely if HIT efforts are
successful. Within the past several years, both the RAND
Corporation and the Legislative Analyst's Office (LAO) have
provided estimates of savings of technology solutions in
health care. RAND estimates national net annual savings
following adoption of $34 billion. LAO estimates, based on
research in other states, fee-for-service Medi-Cal savings in
California of up to $300 million GF annually by increasing
coordination and reducing duplication across a variety of
patient service areas.
COMMENTS
1)Rationale . This urgency bill establishes a governing and
administrative framework for state entities or a third-party
non-profit if that is the direction that California takes in
pursing major federal funding available via the ARRA Health
Information Technology for Economic and Clinical Health
(HITEACH) Act. HITEACH provides $36 billion over six years for
HIT infrastructure and provider adoption incentives.
SB 337
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This bill provides specific authority and direction to prevent
California from failing to draw down funding that will provide
significant benefits to health consumers and providers as well
as increase statewide data continuity.
This bill also addresses several unrelated technical issues,
heard previously in this committee and related to a medical
privacy bill enacted last year to reduce the number of privacy
breaches at health facilities.
2)Health Information Technology refers to the use of information
and communication technology in medical care. HIT can included
EHR, personal health records (PHR), email, electronic provider
reminders, computerized decision analysis, portable
technology, and other forms of electronic information storage
and retrieval. EHR store information about individuals' health
histories and aid clinical decisions by providing
patient-specific data at the point of care. A PHR is typically
is maintained by an individual and provides a summary of the
health and medical history by gathering data from many sources
and making this information accessible online.
After decades of focus on HIT, the industry remains fragmented
and information inconsistent, preventing the improvements in
patient care and practice management possible. While large
hospitals and medical systems have had some success in HIT
adoption, many smaller providers have been unsuccessful. In
addition, because patients change providers frequently,
patients are often unable to enjoy the benefits associated
with HIT, including improved care and portability of
information. The funding and framework provided by both ARRA
and this legislation increase the focus on California's
efforts in standardization and HIT adoption and ensure the
state leverages federal funding accordingly.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081