BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 1196
AUTHOR: Hernandez
AMENDED: April 10, 2012
HEARING DATE: April 18, 2012
CONSULTANT: Moreno
SUBJECT : Claims data disclosure.
SUMMARY : Prohibits a health care services plan (health plan) or
health insurance contract between a plan/insurer (carrier) and a
provider, including a provider of supplies, from prohibiting,
conditioning, or in any way restricting the disclosure of claims
data related to health care services provided to enrollees,
insureds, or beneficiaries of any self-funded health coverage
arrangement to an entity certified by Centers for Medicare &
Medicaid Services (CMS) to generate public reports on the
performance of health care providers.
Existing law:
1.Provides for the regulation of health plans by the Department
of Managed Health Care (DMHC) and for the regulation of health
insurance by the Department of Insurance (DOI).
2.Prohibits contracts between carriers and hospitals or health
care facilities owned by a licensed hospital from containing
any provision that restricts the ability of the carrier from
furnishing information to subscribers, enrollees,
policyholders, or insureds concerning cost range of procedures
or the quality of services.
3.Provides hospitals at least 20 days in advance to review the
methodology and data developed and compiled by the carriers,
requires utilization of appropriate risk adjustment factors
for quality data, requires a disclosure on the carrier's
website about the data developed and compiled by the carriers
and an opportunity for a hospital to provide a link where the
hospital's response to the data can be accessed.
This bill: Prohibits any health plan or health insurance
contract between a carrier and a provider, including a provider
of supplies, from prohibiting, conditioning, or in any way
restricting the disclosure of claims data related to health care
services provided to enrollees, insureds, or beneficiaries of
Continued---
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any self-funded health coverage arrangement to an entity
certified by CMS to generate public reports on the performance
of health care providers.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, this bill will
advance a key provision of the Affordable Care Act (ACA)
intended to improve health care transparency by giving
consumers access to information that will help them make
informed decisions about their health care. Measuring and
publicly reporting information about the performance of
physicians, hospitals and other health care providers is
critical to improving health care quality and controlling
costs. This bill will help ensure successful implementation of
the ACA data access program in California by removing barriers
to accessing data and authorizing the reporting of insurance
claims data to any CMS-certified entity despite plan-provider
contractual provisions that prohibit or restrict the
disclosure of such data.
2.Escalating costs of health care. For many years, health care
expenditures have outpaced inflation. The United States spends
a larger share of its gross domestic product (GDP) on health
care than any other major industrialized country. According to
CMS, expenditures for health care represent 18 percent of the
nation's GDP in 2010. In 1960, health care expenditures
accounted for about five percent of the GDP. By 2019, CMS
projects that health care expenditures will account for 19
percent of GDP. As costs have risen, health care coverage has
become more unaffordable. The 2010 California Employer Health
Benefits Survey found health insurance premiums increased 8.1
percent in California in 2010.
3.Managing costs. According to a February 2008 California
HealthCare Foundation (CHCF) fact sheet, consumers are paying
more attention to the cost of their health care because they
have greater responsibility for paying for it. People with
insurance are coping with higher deductibles and copayments
and some are being offered consumer-driven health savings
accounts as an alternative to traditional insurance. Those who
lack health insurance have an even more daunting task of
anticipating and managing their health care costs. Whether
insured or uninsured, consumers need to understand their
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financial liability and find the best value. Additionally,
employers have an increased interest in price transparency in
order to improve health care outcomes for their employees and
to slow the growth rate of health care expenditures. Despite
this, consumers often do not have the tools to make informed
decisions based on cost and quality of care because some
providers have prevented price and quality information from
being disclosed.
4.Usefulness of data. A March 2006 Report by The Commonwealth
Fund argues knowing prices of health care services is of
little value without information on the total cost of caring
for a given condition and the quality or outcomes of that
care. Transparency and better public information on cost and
quality are essential for three reasons: a) to help providers
improve by benchmarking their performance against others; b)
to encourage private insurers and public programs to reward
quality and efficiency; and c) to help patients make informed
decisions about their care. Transparency can also play an
important role in leveling the playing field, as it can shed
light on the practice of charging patients different prices
for the same care. A March 31, 2012 Los Angeles Times article
entitled, "The bizarre calculus of emergency room charges,"
highlighted a number of discrepancies in charges for health
care services that, at times, did not seem to make sense. For
example, a man with health insurance was billed $13,000 for an
MRI scan of his shoulder that required him to pay $2,500 out
of pocket while his brother-in-law, who lacks health care
coverage, was billed $350 for the same procedure.
5.ACA transparency provisions. The ACA includes a number of
provisions to incentivize quality measurement and reporting as
well as enabling more informed consumer decision-making. Under
the ACA and final implementing regulations issued in December
2011, the Medicare claims database will be made available for
use in producing public reports on the performance of health
care providers. The data will be provided to organizations
certified by CMS, called data aggregators, which will generate
these performance reports and make them available to
consumers.
To be eligible to participate in the federal program,
qualified entities will need to have experience in a variety
of tasks related to the calculation and reporting of
performance measures derived from claims data, including
combining claims data from different payers, designing
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performance reports, sharing performance reports with the
public, working with providers regarding requests for error
correction, and ensuring the privacy and security of data.
Another core requirement for certification is that entities
obtain access to claims data from other sources that can be
combined with the Medicare data for use in public reporting.
The purpose of this requirement is to encourage broader use of
insurance claims data in bringing robust transparency to
health care.
6.Prior legislation. SB 751 (Gaines and Hernandez), Chapter 244,
Statutes of 2011, prohibits contracts between carriers and
hospitals or health care facilities owned by a licensed
hospital from containing any provision that restricts the
ability of the carrier from furnishing information to
subscribers, enrollees, policyholders, or insureds concerning
cost range of procedures or the quality of services. Provides
hospitals at least 20 days in advance to review the
methodology and data developed and compiled by the carriers,
requires utilization of appropriate risk adjustment factors
for quality data, requires a disclosure on the carrier's
website about the data developed and compiled by the carriers
and an opportunity for a hospital to provide a link where the
hospital's response to the data can be accessed.
AB 2389 (Gaines) of 2009 would have prohibited a contract
between a health facility and a carrier from containing a
provision that restricts the ability of the carrier to furnish
information on the cost of procedures or health care quality
information to carrier enrollees. AB 2389 died in the
Assembly on Concurrence.
SB 1300 (Corbett) of 2008 would have prohibited a contract
between a health care provider and a health plan from
containing a provision that restricts the ability of the
health plan to furnish information on the cost of procedures
or health care quality information to plan enrollees. SB 1300
died on the Senate Floor.
AB 2967 (Lieber) of 2007 would have established a Health Care
Cost and Quality Transparency Committee to develop and
recommend to the Secretary of the Health and Human Services
Agency a health care cost and quality transparency plan, and
would have made the Secretary responsible for the timely
implementation of the transparency plan. AB 2967 died in the
Senate Appropriations Committee on the inactive file.
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AB 1296 (Torrico), Chapter 698, Statutes of 2007, requires a
health plan or contractor offering health benefits to
California Public Employees' Retirement System (CalPERS)
members and annuitants to disclose to CalPERS the cost,
utilization, actual claim payments, and contract allowance
amounts for health care services rendered by participating
hospitals to each member and annuitant. Requires this
information to be deemed confidential information.
7.Support. Blue Shield of California states that this bill
advances an important provision of the ACA that promotes
transparency in the provision of health care services, giving
beneficiaries access to information that will help them make
more informed decisions about their health care. The
California School Employees Association, AFL-CIO (CSEA),
writes that this bill will make it possible for consumers and
purchasers to access data on cost, quality, and health care
outcomes, so they can make informed decisions. CSEA states
that it is absolutely important to have data available so that
comparisons and important health care analyses on cost,
quality, and performance can be done. Pacific Business Group
on Health argues public disclosure of the relative quality and
cost of providers drives improved quality and cost
transparency more rapidly than private reporting.
SUPPORT AND OPPOSITION :
Support: Blue Shield of California
California School Employees Association, AFL-CIO
Pacific Business Group on Health
San Diego Electrical Pension Trust
Small Business California
Oppose: None received.
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