Amended in Senate August 19, 2014

Amended in Assembly May 27, 2014

Amended in Assembly April 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1578

Introduced by Assembly Member Pan

(Principal coauthor: Assembly Member Ting)

(Coauthor: Assembly Member Gordon)

(Coauthor: Senator Lieu)

January 30, 2014

begin delete An act to amend Section 12025 of the Government Code, relating to services contracts. end delete begin insert An act to amend Sections 127660, 127662, 127664, and 127665 of the Health and Safety Code, relating to health, and declaring the urgency thereof, to take effect immediately. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1578, as amended, Pan. begin delete Online database: expenditures: service contracts. end delete begin insert Health: The California Health Benefit Review Program. end insert

begin insert

Existing law establishes the California Health Benefit Review Program to assess legislation that proposes to mandate or repeal a mandated health benefit or service, as defined. Existing law requests the University of California, to provide the analysis to the appropriate policy and fiscal committees of the Legislature within 60 days after receiving a request for the analysis. Existing law also requests that the university report to the Governor and the Legislature on the implementation of the program by January 1, 2014.

end insert begin insert

This bill would request the University of California to include essential health benefits and the impact on the California Health Benefit Exchange in the analysis prepared under the program. The bill would further request that the University of California assess legislation that impacts health insurance benefit design, cost sharing, premiums, and other health insurance topics. The bill would request that the university provide the analysis to the appropriate policy and fiscal committees of the Legislature not later than 60 days, or in a manner and pursuant to a timeline agreed to by the Legislature and the program, after receiving the request, as specified. The bill would also extend the date by which the university is requested to report to the Governor and the Legislature on the implementation program until January 1, 2016.

end insert begin insert

Existing law establishes the Health Care Benefits Fund to support the university in implementing the program. Existing law imposes an annual charge on health care service plans and health insurers, as specified, to be deposited into the fund. Existing law prohibits the total annual assessment pursuant to that provision from exceeding $2,000,000. Under existing law, the fund and the program are repealed as of June 30, 2015.

end insert begin insert

This bill would extend until June 30, 2016, the operative date of the program and the fund, including the annual charge on health care service plans and health insurers. The bill would repeal the above-described provisions as of June 30, 2016.

end insert begin insert

This bill would declare that it is to take effect immediately as an urgency statute.

end insert begin delete

Existing law requires the Financial Information System for California (FISCal) to include a state budget transparency component that allows the public to have access, on an Internet Web site, to specified information for each General Fund and federal fund expenditure. Existing law requires, upon full implementation of the FISCal Project for state departments and agencies that are utilizing the full functionality of the FISCal system, specified information regarding contracts for services in the amount of $5,001 or more to be made available to the public on the FISCal Project Internet Web site in a format that allows for searching and sorting by specified categories.

end delete begin delete

This bill would specify additional categories for searching and sorting on the FISCal Project Internet Web site, including the funding source for the contract and information about personal services contracts.

end delete begin delete

The bill would require the Department of Finance to compile information under the categories on the FISCal Project Internet Web site in an annual Personal Services Contractor Expenditure Budget to accompany the Governor’s Budget.

end delete

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 127660 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

127660.  

(a) The Legislature hereby requests the University of
California to establish the California Health Benefit Review
Program to assess legislation proposing to mandate a benefit or
service, as defined in subdivision begin delete (c), end delete begin insert (d), end insert and legislation proposing
to repeal a mandated benefit or service, as defined in subdivision
begin delete (d), end delete begin insert (e), end insert and to prepare a written analysis with relevant data on the
following:

(1) Public health impacts, including, but not limited to, all of
the following:

(A) The impact on the health of the community, including the
reduction of communicable disease and the benefits of prevention
such as those provided by childhood immunizations and prenatal
care.

(B) The impact on the health of the community, including
diseases and conditions where gender and racial disparities in
outcomes are established in peer-reviewed scientific and medical
literature.

(C) The extent to which the benefit or service reduces premature
death and the economic loss associated with disease.

(2) Medical impacts, including, but not limited to, all of the
following:

(A) The extent to which the benefit or service is generally
recognized by the medical community as being effective in the
screening, diagnosis, or treatment of a condition or disease, as
demonstrated by a review of scientific and peer reviewed medical
literature.

(B) The extent to which the benefit or service is generally
available and utilized by treating physicians.

(C) The contribution of the benefit or service to the health status
of the population, including the results of any research
demonstrating the efficacy of the benefit or service compared to
alternatives, including not providing the benefit or service.

(D) The extent to which mandating or repealing the benefits or
services would not diminish or eliminate access to currently
available health care benefits or services.

(3) Financial impacts, including, but not limited to, all of the
following:

(A) The extent to which the coverage or repeal of coverage will
increase or decrease the benefit or cost of the benefit or service.

(B) The extent to which the coverage or repeal of coverage will
increase the utilization of the benefit or service, or will be a
substitute for, or affect the cost of, alternative benefits or services.

(C) The extent to which the coverage or repeal of coverage will
increase or decrease the administrative expenses of health care
service plans and health insurers and the premium and expenses
of subscribers, enrollees, and policyholders.

(D) The impact of this coverage or repeal of coverage on the
total cost of health care.

(E) The potential cost or savings to the private sector, including
the impact on small employers as defined in paragraph (1) of
subdivision (l) of Section 1357, the Public Employees’ Retirement
System, other retirement systems funded by the state or by a local
government, individuals purchasing individual health insurance,
and publicly funded state health insurance programs, including
the Medi-Cal program and the Healthy Families Program.

(F) The extent to which costs resulting from lack of coverage
or repeal of coverage are or would be shifted to other payers,
including both public and private entities.

(G) The extent to which mandating or repealing the proposed
benefit or service would not diminish or eliminate access to
currently available health care benefits or services.

(H) The extent to which the benefit or service is generally
utilized by a significant portion of the population.

(I) The extent to which health care coverage for the benefit or
service is already generally available.

(J) The level of public demand for health care coverage for the
benefit or service, including the level of interest of collective
bargaining agents in negotiating privately for inclusion of this
coverage in group contracts, and the extent to which the mandated
benefit or service is covered by self-funded employer groups.

(K) In assessing and preparing a written analysis of the financial
impact of legislation proposing to mandate a benefit or service and
legislation proposing to repeal a mandated benefit or service
pursuant to this paragraph, the Legislature requests the University
of California to use a certified actuary or other person with relevant
knowledge and expertise to determine the financial impact.

begin insert

(4) The impact on essential health benefits, as defined in Section
1367.005 and Section 10112.27 of the Insurance Code, and the
impact on the California Health Benefit Exchange.

end insert begin insert

(b) The Legislature further requests that the California Health
Benefits Review Program assess legislation that impacts health
insurance benefit design, cost sharing, premiums, and other health
insurance topics.

end insert begin delete

(b)

end delete

begin insert (c) end insert  The Legislature requests that the University of California
provide every analysis to the appropriate policy and fiscal
committees of the Legislature not later than 60 begin delete days end delete begin insert days, or in a
manner and pursuant to a timeline agreed to by the Legislature
and the California Health Benefits Review Program, end insert after receiving
a request made pursuant to Section 127661. In addition, the
Legislature requests that the university post every analysis on the
Internet and make every analysis available to the public upon
request.

begin delete

(c)

end delete

begin insert (d) end insert  As used in this section, “legislation proposing to mandate a
benefit or service” means a proposed statute that requires a health
care service plan or a health insurer, or both, to do any of the
following:

(1) Permit a person insured or covered under the policy or
contract to obtain health care treatment or services from a particular
type of health care provider.

(2) Offer or provide coverage for the screening, diagnosis, or
treatment of a particular disease or condition.

(3) Offer or provide coverage of a particular type of health care
treatment or service, or of medical equipment, medical supplies,
or drugs used in connection with a health care treatment or service.

begin delete

(d)

end delete

begin insert (e) end insert  As used in this section, “legislation proposing to repeal a
mandated benefit or service” means a proposed statute that, if
enacted, would become operative on or after January 1, 2008, and
would repeal an existing requirement that a health care service
plan or a health insurer, or both, do any of the following:

(1) Permit a person insured or covered under the policy or
contract to obtain health care treatment or services from a particular
type of health care provider.

(2) Offer or provide coverage for the screening, diagnosis, or
treatment of a particular disease or condition.

(3) Offer or provide coverage of a particular type of health care
treatment or service, or of medical equipment, medical supplies,
or drugs used in connection with a health care treatment or service.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 127662 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

127662.  

(a) In order to effectively support the University of
California and its work in implementing this chapter, there is
hereby established in the State Treasury, the Health Care Benefits
Fund. The university’s work in providing the bill analyses shall
be supported from the fund.

(b) For fiscal years 2010-11 to begin delete 2014-15, end delete begin insert 2015-16, end insert inclusive,
each health care service plan, except a specialized health care
service plan, and each health insurer, as defined in Section 106 of
the Insurance Code, shall be assessed an annual fee in an amount
determined through regulation. The amount of the fee shall be
determined by the Department of Managed Health Care and the
Department of Insurance in consultation with the university and
shall be limited to the amount necessary to fund the actual and
necessary expenses of the university and its work in implementing
this chapter. The total annual assessment on health care service
plans and health insurers shall not exceed two million dollars
($2,000,000).

(c) The Department of Managed Health Care and the Department
of Insurance, in coordination with the university, shall assess the
health care service plans and health insurers, respectively, for the
costs required to fund the university’s activities pursuant to
subdivision (b).

(1) Health care service plans shall be notified of the assessment
on or before June 15 of each year with the annual assessment notice
issued pursuant to Section 1356. The assessment pursuant to this
section is separate and independent of the assessments in Section
1356.

(2) Health insurers shall be noticed of the assessment in
accordance with the notice for the annual assessment or quarterly
premium tax revenues.

(3) The assessed fees required pursuant to subdivision (b) shall
be paid on an annual basis no later than August 1 of each year.
The Department of Managed Health Care and the Department of
Insurance shall forward the assessed fees to the Controller for
deposit in the Health Care Benefits Fund immediately following
their receipt.

(4) “Health insurance,” as used in this subdivision, does not
include Medicare supplement, vision-only, dental-only, or
CHAMPUS supplement insurance, or hospital indemnity,
accident-only, or specified disease insurance that does not pay
benefits on a fixed benefit, cash payment only basis.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 127664 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

127664.  

The Legislature requests the University of California
to submit a report to the Governor and the Legislature by January
1, begin delete 2014, end delete begin insert 2016, end insert regarding the implementation of this chapter. begin insert This
report shall be submitted in compliance with Section 9795 of the
Government Code. end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 127665 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

127665.  

This chapter shall remain in effect until June 30, begin delete 2015, end delete
begin insert 2016, end insert and shall be repealed as of that date, unless a later enacted
statute that becomes operative on or before June 30, begin delete 2015, end delete begin insert 2016, end insert
deletes or extends that date.

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

end insert begin insert

In order to ensure that the University of California is provided
with sufficient advance notice regarding the continuing duties of
the university to plan and carry out the necessary research and
analysis requested pursuant to this act, it is necessary that this act
take effect immediately.

end insert

begin delete

SECTION 1.  

Section 12025 of the Government Code is
amended to read:

12025.  

(a) Upon full implementation of the Financial
Information System for California (FISCal) Project for state
departments and agencies that are utilizing the full functionality
of the FISCal system, information regarding contracts for services
in the amount of five thousand one dollars ($5,001) or more shall
be made available to the public on the FISCal Project Internet Web
site in a format that allows for searching and sorting by the
following categories:

(1) A description of the contract and the services being
purchased.

(2) A description of the personal services contract and services
being purchased.

(3) The name of the agency, department, or division contracting
for the services.

(4) The name of the contractor and any and all subcontractors,
unless otherwise exempt from disclosure.

(5) The effective date and expiration date of the contract.

(6) The annual amounts paid or to be paid under the contract,
to the contractor, in all fiscal years during which the contract will
be in effect, by funding source.

(7) The original amount of the contract and the total projected
cost of the contract, or maximum cost the contract is prohibited
from exceeding, for all fiscal years during which the contract will
be in effect, by funding source.

(8) The acquisition method.

(b) The Department of Finance shall compile the information
listed in paragraphs (2) to (8), inclusive, of subdivision (a) in an
annual Personal Services Contractor Expenditure Budget
accompanying the Governor’s Budget.

end delete