Bill Text: CA SB1182 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Health care coverage: claims data.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2014-09-25 - Chaptered by Secretary of State. Chapter 577, Statutes of 2014. [SB1182 Detail]

Download: California-2013-SB1182-Amended.html

---

BILL NUMBER: SB 1182	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 22, 2014
	AMENDED IN ASSEMBLY  AUGUST 18, 2014
	AMENDED IN ASSEMBLY  JUNE 30, 2014
	AMENDED IN SENATE  APRIL 10, 2014

INTRODUCED BY   Senator Leno

                        FEBRUARY 20, 2014

   An act to amend  Sections 1374.8, 1385.03, and 1385.04 of
the Health and Safety Code, and to amend Sections 791.27 and 10181.4
of the Insurance Code,    Sections 1374.8 and 1385.07
of, and to add Section 1385.10 to, the Health and Safety Code, and to
amend Sections 791.27 and 10181.7 of, and to add Section 10181.10
to, the Insurance Code,   relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1182, as amended, Leno. Health care coverage: rate review. 

   Existing law, the federal Patient Protection and Affordable Care
Act (PPACA), requires the United States Secretary of Health and Human
Services to establish a process for the annual review of
unreasonable increases in premiums for health insurance coverage in
which health insurance issuers submit to the secretary and the
relevant state, a justification for an unreasonable premium increase
prior to implementation of the increase. Existing law, the Knox-Keene
Health Care Service Plan Act of 1975, provides for the licensure and
regulation of health care service plans by the Department of Managed
Health Care and makes a willful violation of the act a crime.
Existing law also provides for the regulation of health insurers by
the Department of Insurance. For large group plan contracts and
policies, existing law requires a plan or insurer to file rate
information with the appropriate department at least 60 days prior to
implementing an unreasonable rate increase, as defined in PPACA.
Existing law requires the plan or insurer to also disclose specified
aggregate data with that rate filing.  
   This bill would require a health care service plan or health
insurer to annually disclose additional aggregate claims data for all
products sold in the large group market and to provide deidentified
claims data at no charge to a large group purchaser that requests the
information and meets specified conditions. The bill would specify
that all disclosures of data to the large group purchaser made
pursuant to these provisions is required to comply with the federal
Health Insurance Portability and Accountability Act of 1996 (HIPAA),
the federal Health Information Technology for Economic and Clinical
Health Act, and the Confidentiality of Medical Information Act or the
Insurance Information and Privacy Protection Act, as specified. The
bill would prohibit a health care service plan or a health insurer
from disclosing the contracted rates between the health care service
plan or health insurer and a provider to a large group purchaser.
This bill would specify that additional aggregate claims data
disclosed to a large group purchaser by a health care service plan or
health insurer is confidential and is prohibited from being made
public by the department and exempt from disclosure under the
California Public Records Act.  
   Existing law prohibits, with exceptions, a health care service
plan or health insurer from releasing any information to an employer
that would directly or indirectly indicate to the employer that an
employee is receiving or has received services from a health care
provider covered by the plan unless authorized to do so by the
employee.  
   This bill would exempt from the prohibition the release of
relevant information for the purposes set forth in these provisions
regarding a plan's or insurer's annual disclosure of aggregate data
for all products sold in the large group market.  
   Because a willful violation of the bill's requirements by a health
care services plan would be a crime, the bill would impose a
state-mandated local program.  
   Existing constitutional provisions require that a statute that
limits the right of access to the meetings of public bodies or the
writings of public officials and agencies be adopted with findings
demonstrating the interest protected by the limitation and the need
for protecting that interest.  
   This bill would make legislative findings to that effect. 

   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.  
   Existing law, the federal Patient Protection and Affordable Care
Act (PPACA), requires the United States Secretary of Health and Human
Services to establish a process for the annual review of
unreasonable increases in premiums for health insurance coverage in
which health insurance issuers submit to the secretary and the
relevant state a justification for an unreasonable premium increase
prior to implementation of the increase. Existing law, the Knox-Keene
Health Care Service Plan Act of 1975, provides for the licensure and
regulation of health care service plans by the Department of Managed
Health Care and makes a willful violation of the act a crime.
Existing law also provides for the regulation of health insurers by
the Department of Insurance. Existing law requires a health care
service plan or health insurer in the individual, small group, or
large group markets to file rate information with the Department of
Managed Health Care or the Department of Insurance. For individual
and small group contracts and policies, existing law requires a plan
or insurer to file rate information at least 60 days prior to
implementing a rate change and requires a plan or insurer to disclose
with each filing specified information by aggregate benefit
category. Existing law allows a health care service plan that
exclusively contracts with no more than 2 medical groups to provide
or arrange for professional medical services for enrollees of the
plan to meet this requirement by disclosing its actual trend
experience for the prior year using benefit categories that are the
same or similar to those used by other plans.  
   This bill would specify the benefit categories to be used for that
purpose and would make other related changes.  
   For large group plan contracts and policies, existing law requires
a plan or insurer to file rate information with the department at
least 60 days prior to implementing an unreasonable rate increase, as
defined in PPACA. Existing law requires the plan or insurer to also
disclose specified aggregate data with that rate filing. 

   This bill would revise the aggregate information required to be
provided with the rate filing described above, including, among other
things, total earned premiums, total incurred claims, and average
rate of increase for the rate year. The bill would require a plan or
insurer to disclose the methodologies used to develop base rates and
other specified information, including, among other things, all of
the base rates used for groups in the large group market and all of
the factors used to adjust the base rates. The bill would also
require a plan or insurer to provide additional aggregate information
regarding rate changes for the large group market, including, among
other things, the average monthly rate implemented during the prior
year and the average rate change initially requested, as specified.
The bill would require a plan or insurer, under certain
circumstances, to annually disclose additional aggregate data for the
large group market and to provide deidentified claims data at no
charge to a large group purchaser that requests the information and
meets specified conditions.  
   Existing law prohibits, with exceptions, a health care service
plan or health insurer from releasing any information to an employer
that would directly or indirectly indicate to the employer that an
employee is receiving or has received services from a health care
provider covered by the plan unless authorized to do so by the
employee.  
   This bill would exempt from the prohibition the release of
relevant information for the purposes set forth in the provisions
regarding the review of rate changes.  
   Because a willful violation of the bill's requirements by a health
care service plan would be a crime, the bill would impose a
state-mandated local program.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 1374.8 of the   Health
and Safety Code   is amended to read: 
   1374.8.   (a)    A health care service plan
shall not release any information to an employer that would directly
or indirectly indicate to the employer that an employee is receiving
or has received services from a health care provider covered by the
plan unless authorized to do so by the employee. An insurer that has,
pursuant to an agreement, assumed the responsibility to pay
compensation pursuant to Article 3 (commencing with Section 3750) of
Chapter 4 of Part 1 of Division 4 of the Labor Code, shall not be
considered an employer for the purposes of this section. 
Nothing 
    (b)     Nothing  in this section
prohibits a health care service plan from releasing relevant
information described in this section for the purposes set forth in
Chapter 12 (commencing with Section 1871) of Part 2 of Division 1 of
the Insurance Code. 
   (c) Nothing in this section prohibits a health care service plan
from releasing relevant information described in this section for the
purposes set forth in Section 1385.10. 
   SEC. 2.    Section 1385.   07 of the 
Health and Safety Code   is amended to read: 
   1385.07.  (a) Notwithstanding Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code, all
information submitted under this article shall be made publicly
available by the department except as provided in subdivision (b).
   (b)  (1)    The contracted rates between a
health care service plan and a provider shall be deemed confidential
information that shall not be made public by the department and are
exempt from disclosure under the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code). The contracted rates between a health care
service plan and a  large   provider shall not
be disclosed by a health care service plan to a large group purchaser
that receives information pursuant to Section 1385.10. 
    (2)     The contracted rates between a
health care service plan and a large  group shall be deemed
confidential information that shall not be made public by the
department and are exempt from disclosure under the California Public
Records Act (Chapter 3.5 (commencing with Section 6250) of Division
7 of Title 1 of the Government Code).  Information provided to a
large group purchaser pursuant to Section 1385.10 shall be deemed
confidential information that shall not be made public by the
department and shall be exempt from disclosure under the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code   ). 
   (c) All information submitted to the department under this article
shall be submitted electronically in order to facilitate review by
the department and the public.
   (d) In addition, the department and the health care service plan
shall, at a minimum, make the following information readily available
to the public on their Internet Web sites, in plain language and in
a manner and format specified by the department, except as provided
in subdivision (b). The information shall be made public for 60 days
prior to the implementation of the rate increase. The information
shall include:
   (1) Justifications for any unreasonable rate increases, including
all information and supporting documentation as to why the rate
increase is justified.
   (2) A plan's overall annual medical trend factor assumptions in
each rate filing for all benefits.
   (3) A health plan's actual costs, by aggregate benefit category to
include hospital inpatient, hospital outpatient, physician services,
prescription drugs and other ancillary services, laboratory, and
radiology.
   (4) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual plan contract
trends by aggregate benefit category, such as hospital inpatient,
hospital outpatient, physician services, prescription drugs and other
ancillary services, laboratory, and radiology. A health plan that
exclusively contracts with no more than two medical groups in the
state to provide or arrange for professional medical services for the
enrollees of the plan shall instead disclose the amount of its
actual trend experience for the prior contract year by aggregate
benefit category, using benefit categories that are, to the maximum
extent possible, the same or similar to those used by other plans.
   SEC. 3.    Section 1385.10 is added to the  
Health and Safety Code   , to read:  
   1385.10.  (a) (1) A health care service plan shall annually
provide claims data at no charge to a large group purchaser if the
large group purchaser requests the information and otherwise meets
the requirements of this section.
   (2)  The health care service plan shall provide claims data that a
qualified statistician has determined are deidentified so that the
claims data do not identify or do not provide a reasonable basis from
which to identify an individual. If the statistician is unable to
determine that the data has been deidentified, then the data that
cannot be deidentified shall not be provided by the health care
service plan to the large group purchaser. A health care service plan
may provide the claims data in an aggregated form as necessary to
comply with subdivisions (e) and (f).
   (b) (1) As an alternative to providing claims data required
pursuant to subdivision (a), the plan shall provide, at no charge to
a large group purchaser, all of the following:
   (A) Deidentified data sufficient for the large group purchaser to
calculate the cost of obtaining similar services from other health
plans and evaluate cost-effectiveness by service and disease
category.
   (B) Deidentified aggregated patient-level data on demographics,
prescribing, encounters, inpatient services, outpatient services, and
any other data that is comparable to what is required of the health
plan to comply with risk adjustment, reinsurance, or risk corridors
pursuant to the federal Patient Protection and Affordable Care Act
(Public Law 111-148), as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152), and any
rules, regulations, or guidance issued thereunder.
   (C) Deidentified aggregated patient-level data used to experience
rate the large group, including diagnostic and procedure coding and
costs assigned to each service that the plan has available.
   (2) The health care service plan shall obtain a formal
determination from a qualified statistician that the data provided
pursuant to this subdivision have been deidentified so that the data
do not identify or do not provide a reasonable basis from which to
identify an individual. The statistician shall certify the formal
determination in writing and shall, upon request, provide the
protocol used for deidentification to the department.
   (c) Data provided pursuant to this section shall only be provided
to a large group purchaser that meets both of the following
conditions:
   (1) Is able to demonstrate its ability to comply with state and
federal privacy laws.
   (2) Is a large group purchaser that is either an employer with an
enrollment of greater than 1,000 covered lives or a multiemployer
trust.
   (d) Nothing in this section shall be construed to prohibit a plan
and purchaser from negotiating the release of additional information
not described in this section.
   (e) All disclosures of data to the large group purchaser made
pursuant to this section shall comply with 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.
   (f) All disclosures of data to the large group purchaser made
pursuant to this section shall comply with the Confidentiality of
Medical Information Act (Chapter 1 (commencing with Section 56) of
Part 2.6 of Division 1 of the Civil Code). 
   SEC. 4.    Section 791.27 of the   Insurance
Code   is amended to read: 
   791.27.  (a)    A disability insurer that
provides coverage for hospital, medical, or surgical expenses shall
not release any information to an employer that would directly or
indirectly indicate to the employer that an employee is receiving or
has received services from a health care provider covered by the plan
unless authorized to do so by the employee. An insurer that has,
pursuant to an agreement, assumed the responsibility to pay
compensation pursuant to Article 3 (commencing with Section 3750) of
Chapter 4 of Part 1 of Division 4 of the Labor Code, shall not be
considered an employer for the purposes of this section. 
Nothing 
   (b)     Nothing  in this section
prohibits a disability insurer from releasing relevant information
described in this section for the purposes set forth in Chapter 12
(commencing with Section 1871) of Part 2 of Division 1. 
   (c) Nothing in this section prohibits a disability insurer from
releasing relevant information described in this section for the
purposes set forth in Section 10181.10. 
   SEC. 5.    Section 10181.7   of the 
 Insurance Code   is amended to read: 
   10181.7.  (a) Notwithstanding Chapter 3.5 (commencing with Section
6250) of Division 7 of Title 1 of the Government Code, all
information submitted under this article shall be made publicly
available by the department except as provided in subdivision (b).
   (b)  (1)    Any contracted rates between a
health insurer and a provider shall be deemed confidential
information that shall not be made public by the department and are
exempt from disclosure under the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code). The contracted rates between a health
insurer and a  large   provider shall not be
disclosed by a health insurer to a large group purchaser that
receives information pursuant to Section 10181.10. 
    (2)     The contracted rates between a
health insurer and a large  group shall be deemed confidential
information that shall not be made public by the department and are
exempt from disclosure under the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code).  Information provided to a large group
purchaser pursuant to Section 10181.10 shall be deemed confidential
information that shall not be made public by the department and shall
be exempt from disclosure under the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code). 
   (c) All information submitted to the department under this article
shall be submitted electronically in order to facilitate review by
the department and the public.
   (d) In addition, the department and the health insurer shall, at a
minimum, make the following information readily available to the
public on their Internet Web sites, in plain language and in a manner
and format specified by the department, except as provided in
subdivision (b). The information shall be made public for 60 days
prior to the implementation of the rate increase. The information
shall include:
   (1) Justifications for any unreasonable rate increases, including
all information and supporting documentation as to why the rate
increase is justified.
   (2) An insurer's overall annual medical trend factor assumptions
in each rate filing for all benefits.
   (3) An insurer's actual costs, by aggregate benefit category to
include, hospital inpatient, hospital outpatient, physician services,
prescription drugs and other ancillary services, laboratory, and
radiology.
   (4) The amount of the projected trend attributable to the use of
services, price inflation, or fees and risk for annual policy trends
by aggregate benefit category, such as hospital inpatient, hospital
outpatient, physician services, prescription drugs and other
ancillary services, laboratory, and radiology.
   SEC. 6.    Section 10181.10 is added to the 
 Insurance Code   , to read:  
   10181.10.  (a) (1) A health insurer shall annually provide claims
data at no charge to a large group purchaser if the large group
purchaser requests the information and otherwise meets the
requirements of this section.
   (2) The health insurer shall provide claims data that a qualified
statistician has determined are deidentified so that the claims data
do not identify or do not provide a reasonable basis from which to
identify an individual. If the statistician is unable to determine
that the data has been deidentified, then the data that cannot be
deidentified shall not be provided by the health insurer to the large
group purchaser. A health insurer may provide the claims data in an
aggregated form as necessary to comply with subdivisions (e) and (f).

   (b) (1) As an alternative to providing claims data required
pursuant to subdivision (a), the insurer shall provide, at no charge
to a large group purchaser, all of the following:
   (A) Deidentified data sufficient for the large group purchaser to
calculate the cost of obtaining similar services from other health
insurers and plans and evaluate cost-effectiveness by service and
disease category.
   (B) Deidentified aggregated patient-level data on demographics,
prescribing, encounters, inpatient services, outpatient services, and
any other data that is comparable to what is required of the health
insurer to comply with risk adjustment, reinsurance, or risk
corridors pursuant to the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the federal Health Care
and Education Reconciliation Act of 2010 (Public Law 111-152), and
any rules, regulations, or guidance issued thereunder.
   (C) Deidentified aggregated patient-level data used to experience
rate the large group, including diagnostic and procedure coding and
costs assigned to each service that the insurer has available.
   (2) The health insurer shall obtain a formal determination from a
qualified statistician that the data provided pursuant to this
subdivision have been deidentified so that the data do not identify
or do not provide a reasonable basis from which to identify an
individual. The statistician shall certify the formal determination
in writing and shall, upon request, provide the protocol used for
deidentification to the department.
   (c) Data provided pursuant to this section shall only be provided
to a large group purchaser that meets both of the following
conditions:
   (1) Is able to demonstrate its ability to comply with state and
federal privacy laws.
   (2) Is a large group purchaser that is either an employer with an
enrollment of greater than 1,000 covered lives or a multiemployer
trust.
   (d) Nothing in this section shall be construed to prohibit an
insurer and purchaser from negotiating the release of additional
information not described in this section.
   (e) All disclosures of data to the large group purchaser made
pursuant to this section shall comply with 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.
   (f) All disclosures of data to the large group purchaser made
pursuant to this section shall comply with the Insurance Information
and Privacy Protection Act (Chapter 1 (commencing with Section 791)
of Part 2 of Division 1 of the Insurance Code). 
   SEC. 7.    The Legislature finds and declares that
Section 2 of this act, which amends Section 1385.07 of the Health and
Safety Code, and Section 5 of this act, which amends Section
10181.07 of the Insurance Code, imposes a limitation on the public's
right of access to the meetings of public bodies or the writings of
public officials and agencies within the meaning of Section 3 of
Article I of the California Constitution. Pursuant to that
constitutional provision, the Legislature makes the following
findings to demonstrate the interest protected by this limitation and
the need for protecting that interest:  
   In order to protect the public's interest in access to
high-quality health care coverage in the most efficient,
cost-effective manner for those individuals who receive his or her
health care coverage through a large employer or multi-employer
trust, it is necessary that additional aggregate data disclosed by a
health care service plan or health insurer to a large group purchaser
remain confidential. 
   SEC. 8.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.  All matter omitted in this version of
the bill appears in the bill as amended in the Assembly, August 18,
2014. (JR11)