Amended in Assembly June 30, 2014

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 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, the Health and Safety Code, relating to health care.

LEGISLATIVE COUNSEL’S DIGEST

SB 1322, as amended, Hernandez. California Health Care Cost and Quality Database.

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 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 safe, medically effective, patient-centered, timely, affordable, and equitable. The 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 begin delete collect end delete begin insert receive end insert , process, maintain, and analyze information from specified data sources including, among others, begin delete electronic health record systems and end delete 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 and would require that database to be updated regularly.

This bill would also require the secretary to convene an advisory committee composed of a broad spectrum of health care stakeholders and experts begin insert , as specified, end insert 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. The bill would require the committee to issue a report to the Legislature and the Governor that examines and addresses specified issues, including, among others, containing the cost of health care services and coverage. The bill would provide that the commission not be convened until the Director of Finance has determined that sufficient private or federal funds have been received and appropriated for that purpose, and that members of the committee not receive a per diem or travel expense reimbursement, or any other expense reimbursement.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

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Statutes of 2004, is repealed.

SEC. 2.  

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

 

Chapter  8. California Health Care Cost and Quality
Database

 

127670.  

(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.

127671.  

(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 begin insert unless
funding is received from another nonprofit or government source
and is for the purpose of research or education end insert .

(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 begin delete collect end delete begin insert receive end insert , process, maintain, and analyze
information from data sources including, but not limited to, claims
from private and public payers begin delete , electronic health record systems end delete ,
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.

127672.  

(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 begin insert , including,
but not limited to, representatives of the entities that are required
to provide information pursuant to subdivision (c) of Section
127671 and representatives of purchasers, including, but not
limited to, businesses, organized labor, and consumers, end insert 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.