BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1558 (R. Hernandez) - California Health Data Organization:
all payer claims database.
Amended: June 5, 2014 Policy Vote: Health 6-1
Urgency: No Mandate: No
Hearing Date: August 4, 2014
Consultant: Brendan McCarthy
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1558 requests the University of California
establish an all payer claims database, which would be used to
collect information from health insurers and health plans on
payments made to medical providers for analysis of the health
care market.
Fiscal Impact: The state of Colorado has recently developed an
all payer claims database similar in functionality to the one
requested in this bill. The following cost estimates are
informed by the actual expenditures to develop and operate the
Colorado All Payer Claims Database. Due to the size and
complexity of the California healthcare marketplace, staff
anticipates that the cost to the state develop and maintain an
all payer claims database is likely to be two to five times the
cost to do so in Colorado.
One-time costs between $3 million and $10 million for
planning and initial policy development relating to the
proposed all payer claims database (General Fund).
One-time costs between $15 million and $30 million to
create the database, including the information technology
infrastructure to accept data submissions from payers,
review submitted claims data, and analyze claims data
(General Fund).
Ongoing operations and maintenance costs between $5 million
and $12 million per year for operations and maintenance of
the database, data analysis, and other administrative costs
(General Fund).
AB 1558 (R. Hernandez)
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Unknown potential fee revenues (General Fund). The Colorado
All Payer Claims Database is supported, in part, by fees
charged for access to data or specific reports prepared by
the staff. AB 1558 limits the University of California's
ability to assess fees for access to data to the actual cost
to provide that access. This limitation will likely reduce
the potential to generate fee revenues to offset some
operating costs.
Background: Several other states have established all payer
databases to assist in the analysis of health care markets,
increase transparency, and potentially reduce health care
spending over the long run due to increased transparency. In
general, an all payer database is used to collect claims data
from some or all payers (potentially including private insurers,
private health plans, employers, and state and federal health
care programs such as Medicare or Medicaid programs). By
collecting claims data in a central database, states hope to
improve transparency by analyzing the costs for health care
services and potentially tying those costs to outcomes.
Proposed Law: AB 1558 requests the University of California
establish an all payer claims database, which would be used to
collect information from health insurers and health plans on
payments made to providers for analysis of the health care
market.
Specific provisions of the bill would:
Request the University of California to establish an
organization to create an all payer claims database;
Request that the organization not be based in a school of
medicine or University medical center;
Request the University to solicit federal or other funds to
defray the costs of developing the system;
Request the organization to collect claims data from
private payers and publicly available data, request data
from the Medi-Cal and Medicare programs, request data from
Covered California, combine claims data with publicly
available data on outcomes and patient experiences, protect
patient privacy and prevent the disclosure of information
that could be used to identify a patient or health care
provider;
Require private payers to submit claims data to the
organization (including claims data on medical, dental,
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mental health, and substance abuse disorder services) and
information on cost sharing by patients;
Prohibit private payers from being required to provide
claims data relating to the Medi-Cal or Medicare programs;
Request the organization to engage in stakeholder
consultation;
Authorize the organization to request and receive
donations;
Request the organization to analyze the data and make it
available to the public.
Related Legislation: SB 1322 (E. Hernandez) would require the
Secretary of the Health and Human Services Agency to contract
with one or more nonprofit organizations for the establishment
of an all payer claims database. That bill is pending in the
Assembly Appropriations Committee.
Staff Comments: Under the California Constitution, the
legislature has limited control or oversight over the University
of California. Therefore, this bill only requests the University
to create an all payer claims database. The Legislature cannot
mandate that the University do so. Given the Constitutional
independence of the University of California, if this bill is
enacted and the University does create an all payer claims
database, the Legislature would have very limited oversight
capabilities to ensure that the University is in compliance with
the intent of this bill. In addition, because the University
owns and operates several medical centers, it is a significant
provider of health care services in the state. The bill includes
provisions that attempt to prevent any conflicts of interest
between the University as a health care provider and as an
entity analyzing health care spending. However, the University
has raised concerns that the bill could create perceived
conflicts of interest between University medical centers and
third party payers.