Amended in Assembly June 17, 2014

Amended in Senate April 1, 2014

Senate Bill No. 1322

Introduced by Senator Hernandez

February 21, 2014

An act to add begin delete Sections 127670 and 127671 to end delete begin insert Chapter 8 (commencing with Section 127670) to Part 2 of Division 107 of, and to repeal the heading of Chapter 8 (formerly commencing with Section 127670) of Part 2 of Division 107 of, end insert the Health and Safety Code, relating to health care.

LEGISLATIVE COUNSEL’S DIGEST

SB 1322, as amended, Hernandez. California Health Care begin delete Quality Improvement and Cost Containment Commission. end delete begin insert Cost and Quality Database. end insert

Existing law establishes health care coverage programs to provide health care to segments of the population meeting specified criteria who are otherwise unable to afford health care coverage and provides for the licensure and regulation of health insurers and health care service plans.

This bill would state the intent of the Legislature to begin delete make available end delete begin insert establish a system to provide end insert valid begin insert health care end insert performance information begin delete to encourage health care providers and facilities end delete begin insert that is end insert begin insert publicly available and can be used to improve the safety, appropriateness, and medical effectiveness of health care, and end insert to provide care that is safe, medically effective, patient-centered, timely, begin delete efficient, end delete begin insert affordable, end insert and equitable. The begin insert bill would require the Secretary of California Health and Human Services to, no later than January 1, 2016, enter into a contract with one or more private, independent, nonprofit organizations to establish and administer the California Health Care Cost and Quality Database. The bill would require the secretary to include specified terms in that contract or contracts, including, among others, that the nonprofit organization or organizations establishing and administering the California Health Care Cost and Quality Database develop methodologies relating to the submission of health care data by health care entities. The bill would require certain health care entities, including health care service plans, to provide specified information to the nonprofit organization or organizations establishing and administering the California Health Care Cost and Quality Database. The bill would require all data disclosures made pursuant to these provisions to comply with all applicable state and federal laws for the protection of the privacy and security of the data and would prohibit the public disclose of any unaggregated, individually identifiable health information. The bill would require the nonprofit organization or organizations establishing and administering the California Health Care Cost and Quality Database to collect, process, maintain, and analyze information from specified data sources including, among others, electronic health record systems and disease and chronic condition registries. The bill would require, no later than January 1, 2018, the nonprofit organization or organizations establishing and administering the California Health Care Cost and Quality Database to publicly make available a web-based, searchable database end insert begin insert and would require that database to be updated regularly. end insert

begin insert This end insert bill would begin insert also end insert require the begin delete Governor end delete begin insert secretary end insert to convene begin delete the California Health Care Quality Improvement and Cost Containment Commission and would specify the composition of the commission. The bill would require the commission to examine and address specified health care issues. end delete begin insert end insert begin insert an advisory committee composed of a broad spectrum of health care stakeholders and experts to research and recommend strategies for promoting high-quality health care and containing health care costs, and to make recommendations regarding the California Health Care Cost and Quality Database. end insert The bill would require the begin delete commission end delete begin insert committee end insert to issue a report to the Legislature and the begin delete Governor, on or before July 1, 2015, or within 6 months of the commission being convened, whichever occurs later, making recommendations for health care quality improvement and cost containment. end delete begin insert Governor that examines and addresses specified issues, including, among others, containing the cost of health care services and coverage. end insert The bill would provide that the commission not be convened until begin insert the Director of Finance has determine end insert begin insert d that end insert sufficient private or federal funds have been received and appropriated for that begin delete purpose. end delete begin insert purpose, and that members of the committee not receive a per diem or travel expense reimbursement, or any other expense reimbursement. end insert

Vote: majority. 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 The heading of Chapter 8 (formerly commencing
with Section 127670) of Part 2 of Division 107 of the end insert begin insert Health and
Safety Code end insert begin insert , as amended by Section 230 of Chapter 183 of the
Statutes of 2004, is repealed. end insert

begin delete

 

Chapter  8. California Health Care Quality Improvement and Cost Containment Commission

 

end delete

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Chapter 8 (commencing with Section 127670) is added
to Part 2 of Division 107 of the end insert begin insert Health and Safety Code end insert begin insert , to read: end insert

begin insert

 

Chapter   begin insert 8. end insert California Health Care Cost and Quality
Database

 

begin insert 127670. end insert   

(a) It is the intent of the Legislature to establish a
system to provide valid health care performance information that
is publicly available and can be used to improve the safety,
appropriateness, and medical effectiveness of health care, and to
provide care that is patient-centered, timely, affordable, and
equitable. It is also the intent of the Legislature to grant access to
provider performance information to consumers and purchasers
in order for them to understand the potential financial
consequences and liabilities and obtain maximum quality and
value in health care services.

(b) It is the intent of the Legislature, by making cost and quality
data available, to encourage health care service plans, health
insurers, and providers to develop innovative approaches, services,
and programs that may have the potential to deliver health care
that is both cost effective and responsive to the needs of enrollees.

begin insert 127671. end insert   

(a) The Secretary of California Health and Human
Services shall, no later than January 1, 2016, use a competitive
process to contract with one or more private, independent,
nonprofit organizations in order to establish and administer the
California Health Care Cost and Quality Database. A contract
entered into pursuant to this section is exempt from Part 2
(commencing with Section 10100) of Division 2 of the Public
Contract Code, and is exempt from review or approval by any
division of the Department of General Services.

(b) The secretary shall include as a term in the contract or
contracts entered into pursuant to subdivision (a) all of the
following:

(1) A requirement that the nonprofit organization or
organizations establishing and administering the California Health
Care Cost and Quality Database do all of the following:

(A) Develop methodologies for the collection, validation,
refinement, analysis, comparison, review, reporting, and
improvement of health care data submitted by health care entities
that are validated, recognized as reliable, and meet industry and
research standards.

(B) Receive information from all types of health care entities
and report that information in a form that allows valid comparisons
across care delivery systems.

(C) Comply with the requirements governing provider and
supplier requests for error correction established pursuant to
Section 401.717 of Title 42 of the Code of Federal Regulations for
all claims data received, including, but not limited to, data from
sources other than Medicare.

(2) A prohibition on the nonprofit organization or organizations
establishing and administering the California Health Care Cost
and Quality Database doing either of the following:

(A) Using the data received during the execution of the contract
for any purpose not specified in this chapter or in the contract.

(B) Receiving funding from any other source to accomplish the
same purposes sought to be accomplished under this chapter.

(3) A requirement that the nonprofit organization or
organizations establishing and administering the California Health
Care Cost and Quality Database identify the type of data, purpose
of use, and entities and individuals that are required to report to,
or that may have access to, the Health Care Cost and Quality
Database.

(c) For the purposes implementing the California Health Care
Cost and Quality Database, a health care service plan, including
a specialized health care service plan, an insurer licensed to
provide health insurance, as defined in Section 106 of the
Insurance Code, a self-insured employer, or a multiemployer
self-insured plan, that is responsible for paying for health care
services provided to beneficiaries, the trust administrator for a
multiemployer self-insured plan, a supplier, as defined in
paragraph (3) of subdivision (b) of Section 1367.50, or a provider,
as defined in paragraph (2) of subdivision (b) of Section 1367.50,
shall provide both of the following to the nonprofit organization
or organizations establishing and administering the California
Health Care Cost and Quality Database:

(1) Utilization data from insurers’ medical, dental, and
pharmacy claims and encounter data from entities that do not use
claims data, including, but not limited to, integrated delivery
systems.

(2) Pricing information for health care items and services
gathered from allowed charges for covered health care items and
services or, in the case of organizations that do not use or produce
individual claims, standard price lists.

(d) (1)   All disclosures of data made pursuant to this section
shall comply with all applicable state and federal laws for the
protection of the privacy and security of the data, including, but
not limited to, the federal Health Insurance Portability and
Accountability Act of 1996 (Public Law 104-191) and the federal
Health Information Technology for Economic and Clinical Health
Act, Title XIII of the federal American Recovery and Reinvestment
Act of 2009 (Public Law 111-5), and implementing regulations.

(2) (A) All policies and protocols developed in the performance
of the contract shall ensure that the privacy, security, and
confidentiality of individually identifiable health information is
protected. The nonprofit organization or organizations establishing
and administering the California Health Care Cost and Quality
Database shall not publicly disclose any unaggregated, individually
identifiable health information.

(B) For the purposes of this paragraph, “individually
identifiable health information” has the same meaning as in
Section 160.103 of Title 45 of the Code of Federal Regulations.

(e) (1) The nonprofit organization or organizations establishing
and administering the California Health Care Cost and Quality
Database shall collect, process, maintain, and analyze information
from data sources including, but not limited to, claims from private
and public payers, electronic health record systems, disease and
chronic condition registries, third-party surveys of quality and
patient satisfaction, reviews by licensing and accrediting bodies,
and local and regional public health data. Aggregated payer and
provider performance on validated measures of clinical quality
and patient experience, such as measures from the Healthcare
Effectiveness Data and Information Set (HEDIS) and Consumer
Assessment of Healthcare Providers and Systems (CAHPS), shall
be collected from accrediting organizations, including, but not
limited, to the National Committee for Quality Assurance (NCQA),
URAC, and the Joint Commission.

(2) The nonprofit organization or organizations establishing
and administering the California Health Care Cost and Quality
Database shall include all of the following in an analysis performed
pursuant to paragraph (1):

(A) Population-level data on prevention, screening, and wellness
utilization.

(B) Population-level data on behavioral and medical risk
factors, interventions and outcomes.

(C) Population-level data on chronic conditions, management,
and outcomes.

(D) Population-level data on trends in utilization of procedures
for treatment of similar conditions to evaluate medical
appropriateness.

(E) Data that permits socioeconomic status and disparities in
care due to race, ethnicity, gender, sexual orientation, and gender
identity to be considered.

(f) No later than January 1, 2018, the nonprofit organization
or organizations establishing and administering the California
Health Care Cost and Quality Database shall make publicly
available a web-based, searchable database. The information shall
be presented in a way that facilitates comparisons of cost, quality,
and satisfaction across payers, provider organizations, and other
suppliers of health care services. This public database shall be
regularly updated to reflect new data submissions.

begin insert 127672. end insert   

(a) The Secretary of California Health and Human
Services shall convene an advisory committee, composed of a
broad spectrum of health care stakeholders and experts to research
and recommend appropriate and timely strategies for promoting
high-quality health care, containing health care costs, and making
recommendations regarding the establishment, implementation,
and ongoing administration of the California Health Care Cost
and Quality Database, including a business plan for sustainability
without using moneys from the General Fund. The advisory
committee shall hold public meetings with stakeholders, solicit
input, and set its own meeting agendas. Meetings of the advisory
committee are subject to the Bagley-Keene Open Meeting Act
(Article 9 (commencing with Section 11120) of Chapter 1 of Part
1 of Division 3 of Title 2 of the Government Code).

(b) The secretary shall arrange for the preparation of a report
to the Legislature and the Governor based on the findings of the
advisory committee, including input from the public meetings, that
shall, at a minimum, examine and address the following issues:

(1) Assessing California health care needs and available
resources.

(2) Containing the cost of health care services and coverage.

(3) Improving the quality and medical appropriateness of health
care.

(4) Increasing the transparency of health care costs and the
relative efficiency with which care is delivered.

(5) Use of disease management, wellness, prevention, and other
innovative programs to keep people healthy and reduce disparities
and costs and improving health outcomes for all populations.

(6) Efficient utilization of prescription drugs and technology.

(7) Reducing unnecessary, inappropriate, and wasteful health
care.

(8) Educating consumers in the use of health care information.

(9) Using existing data sources to build the Health Care Cost
and Quality Database.

(c) The advisory committee established pursuant to this section
shall not be convened until the Director of Finance has determined
that sufficient private or federal funds have been received and that
the funds have been appropriated for that purpose.

(d) Notwithstanding any other provision of law, the members
of the advisory committee shall receive no per diem or travel
expense reimbursement, or any other expense reimbursement.

end insert

begin delete

SECTION 1.  

Section 127670 is added to the Health and Safety
Code, to be added to Chapter 8 (formerly commencing with Section
127670) of Part 2 of Division 107, to read:

127670.  

(a) It is the intent of the Legislature to make available
valid performance information to encourage health care providers
and facilities to provide care that is safe, medically effective,
patient-centered, timely, efficient, and equitable. It is also the intent
of the Legislature to put provider performance information into
the hands of consumers and purchasers so that they are able to
understand their financial liability and find the best quality and
value.

(b) It is the intent of the Legislature to encourage health care
service plans, health insurers, and providers to develop innovative
approaches, services, and programs that may have the potential to
deliver health care that is both cost effective and responsive to the
needs of enrollees.

SEC. 2.  

Section 127671 is added to the Health and Safety Code, to be added to Chapter 8 (formerly commencing with Section
127670) of Part 2 of Division 107, to read:

127671.  

(a) The Governor shall convene the California Health
Care Quality Improvement and Cost Containment Commission to
research and recommend appropriate and timely strategies for
promoting high-quality care and containing health care costs.

(b) The commission shall be composed of 13 members who are
knowledgeable about the health care system and health care
spending.

(c) The Governor shall appoint five members of the commission,
the Senate Committee on Rules shall appoint three members, and
the Speaker of the Assembly shall appoint three members. The
membership shall be comprised of at least one of each of the
following:

(1) A representative of California’s business community.

(2) A representative from organized labor.

(3) A representative of consumers.

(4) A health care practitioner.

(5) A hospital industry representative.

(6) A representative of the health insurance industry.

(7) A representative of the legal community with expertise in
health and ethics.

(8) A representative of persons with disabilities.

(9) A health care economist.

(d) The Secretary of the California Health and Human Services
Agency and the Executive Director of Covered California shall
serve as members of the commission.

(e) The Governor shall appoint the chairperson of the
commission.

(f) The commission shall, on or before July 1, 2015, or within
six months of the convening of the commission, whichever occurs
later, issue a report to the Legislature and the Governor making
recommendations for health care quality improvement and cost
containment. The commission shall, at a minimum, examine and
address the following issues:

(1) Assessing California health care needs and available
resources.

(2) Containing the cost of health care services and coverage.

(3) Improving the quality of health care.

(4) Increasing the transparency of health care costs and the
relative efficiency with which care is delivered.

(5) Use of disease management, wellness, prevention, and other
innovative programs to keep people healthy while reducing costs
and improving health outcomes.

(6) Consolidation of existing state programs to achieve
efficiencies where possible.

(7) Efficient utilization of prescription drugs and technology.

(g) The commission established pursuant to this section shall
not be convened until sufficient private or federal funds have been
received and appropriated for that purpose.

end delete