BILL ANALYSIS Ó
AB 1558
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ASSEMBLY THIRD READING
AB 1558 (Roger Hernández)
As Introduced January 28, 2014
Majority vote
HEALTH 19-0 APPROPRIATIONS 16-0
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|Ayes:|Pan, Maienschein, |Ayes:|Gatto, Bigelow, |
| |Ammiano, Chau, Bonilla, | |Bocanegra, Bradford, Ian |
| |Bonta, Chávez, Chesbro, | |Calderon, Campos, Eggman, |
| |Gomez, Gonzalez, Roger | |Gomez, Holden, Jones, |
| |Hernández, Lowenthal, | |Linder, Pan, Quirk, |
| |Waldron, Nazarian, | |Ridley-Thomas, Wagner, |
| |Nestande, Patterson, | |Weber |
| |Ridley-Thomas, Wagner, | | |
| |Wieckowski | | |
| | | | |
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SUMMARY : Creates the California Health Data Organization (CHDO)
within the University of California (UC) to organize data
provided by health plans and insurers (carriers) on a Web site
to allow consumers to compare the prices paid for procedures, as
specified. Specifically, this bill :
1)Requests UC to establish CHDO. Creates various requirements
for CHDO, including:
a) Establish a carrier claims database, as specified;
b) Collect and organize carrier data into the following
categories: i) charges and total amounts paid by carriers
and patients; ii) type of health care service; and, iii)
information relating to risk adjustment; and,
c) Disseminate information collected to the public through
an easily searchable Web site that allows for the
comparison of prices paid by carriers per procedure.
2)Prohibits the data made available to the public from
containing any individually identifiable information.
3)Authorizes CHDO to contract with a qualified, nongovernmental,
independent third party to obtain a commercially available
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claims dataset until CHDO collects its first set of data
directly from carriers.
4)Requests UC to seek federal and private funding to cover
planning, implementation, and administration costs.
Authorizes CHDO to explore alternative sources of funding, to
the extent permitted by law, to ensure the sustainability of
CHDO. Authorizes CHDO to receive and accept gifts, grants, or
donations from federal, state, and local government agencies,
individuals, associations, private foundations, and
corporation, in compliance with conflict-of-interest
provisions adopted at a public meeting.
5)Authorizes CHDO to charge a reasonable fee to each person or
entity requesting access to data stored in the database, not
to exceed the actual costs of providing that access.
6)Requires CHDO to use the data collected to produce
geographically-aggregated annual reports on the cost of
specific ambulatory care procedures and services and inpatient
physician services.
7)Requires carriers, as specified, to provide a copy of
explanations of benefits or explanations of review, as
specified, to the CHDO.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Based on costs incurred by a similar project implemented in
Colorado, and assuming California's system costs 2.5 times as
much, estimated costs to UC to support an all-payer claims
database (APCD) in the following range (all costs are assumed
General Fund; a portion may be offset by federal grant funds
or fee revenues): a) planning costs: $5 million; b)
development and implementation costs: $15 million; and, c)
ongoing maintenance costs: $7.5 million.
2)Costs to support other functions, including the development of
a searchable public Web site and consumer assistance, as well
as data provided for purchasers, could vary greatly based on
the sophistication and level of detail provided, but would
probably exceed $1 million for development. Ongoing staff and
consulting costs would likely be in a similar range.
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3)A portion of ongoing costs may be offset by fees for sale of
data products. Colorado, for example, offset about 20% of
operating costs through the sale of data products.
4)Potential ongoing, likely minor, workload costs to the
California Department of Insurance (CDI) and the Department of
Managed Health Care for technical assistance and coordination,
depending on how CHDO implements the law and its data
collection and reporting methodologies.
COMMENTS : APCDs are large-scale databases that systematically
collect medical claims, pharmacy claims, dental claims
(typically, but not always), and eligibility and provider files
from private and public payers. Possible benefits of APCDs
include: filling critical information gaps for state agencies;
supporting health care and payment reform initiatives; and
creating transparency for consumers, purchasers, and state
agencies. APCDs have been established in Maine, Kansas,
Maryland, Massachusetts, New Hampshire, Minnesota, Tennessee,
Utah, and Vermont.
In September 2013, CDI received a $5.2 million federal grant to
contract with an academic institution or other nonprofit
organization to establish a database of medical claims data that
incorporates claims data from private issuers, public payers,
and potentially, self-funded plans. These data will be analyzed
to determine average prices for common medical procedures and
geographic differences in medical pricing. The funds will also
be used to design a consumer-friendly Web site that presents
health pricing and quality information in an integrated manner.
Supporters, which include consumer and labor groups, write that
many people who are newly eligible for subsidized health
coverage through the Affordable Care Act are unfamiliar with
health plan billing practices, and that this bill will lead to
greater transparency for consumers, an important feature for
consumers who are faced with decisions about when and how to
access critical services under their new health insurance
coverage.
Opponents, which include the California Hospital Association
(CHA) and the California Optometric Association, argue that this
bill should include safeguards that allow providers to ensure
quality and accuracy of reported information. CHA further
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argues that the establishment of CHDO should include a robust
stakeholder process that is not included in this bill.
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097
FN: 0003769