BILL NUMBER: AB 2967	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 13, 2008

INTRODUCED BY   Assembly Member  Fuentes  
Lieber 

                        FEBRUARY 22, 2008

   An act to add Chapter 4 (commencing with Section 128850) to Part 5
of Division 107 of the Health and Safety Code, relating to health
care.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2967, as amended,  Fuentes   Lieber 
. Health care cost and quality transparency.
   Existing law creates the California Health and Human Services
Agency.
   This bill would create the California Health Care Cost and Quality
Transparency Committee in the Health and Human Services Agency, with
specified powers and duties, including the development of a health
care cost and quality transparency plan, which would include various
strategies to improve medical data collection and reporting
practices. The bill would require the Secretary of California Health
and Human Services and the committee to undertake duties specified in
the bill, including implementing various strategies to improve
health care quality, and related performance measures. This bill
would require the secretary, or the Office of Statewide Health
Planning and Development to adopt regulations as necessary to carry
out the bill's requirements.
   The bill would provide for the confidentiality of information
obtained in the course of the data collection activities implemented
under the bill. The bill would establish the Health Care Cost and
Quality Transparency Fund, consisting of specified fees authorized
under the bill. The fund would be used, upon appropriation, to
support implementation of the activities required under the bill.
   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.  Chapter 4 (commencing with Section 128850) is added to
Part 5 of Division 107 of the Health and Safety Code, to read:
      CHAPTER 4.  HEALTH CARE COST AND QUALITY TRANSPARENCY



      Article 1.  General Provisions


   128850.  The Legislature hereby finds and declares all of the
following:
   (a) The steady rise in health costs is eroding health access,
straining public health and finance systems, and placing an undue
burden on the state's economy.
   (b) The effective use and distribution of health care data and
meaningful analysis of that data will lead to greater transparency in
the health care system, resulting in improved health care quality
and outcomes, more cost-effective care, and improvements in life
expectancy, reduced death rates, and improved overall public health.
   (c) Hospitals, physicians, health care providers, and health
insurers that have access to systemwide performance data can use the
information to improve patient safety, efficiency of health care
delivery, and quality of care,  leading   which
would lead  to quality improvement and costs savings throughout
the health care system.
   (d) The State of California is uniquely positioned to collect,
analyze, and report all payer data on health care utilization,
quality, and costs in the state in order to facilitate value-based
purchasing of health care and to support and promote continuous
quality improvement among health plans and providers.
   (e) Establishing statewide data and common measurement, and
analyses of health care costs, quality, and outcomes will identify
appropriate health care utilization and ensure the highest quality of
health care services for all Californians.
   (f) Comprehensive statewide data and common measurement will allow
analysis of the provision of care, so that efforts can be undertaken
to improve health outcomes for all Californians, including those
groups with demonstrated health disparities.
   (g) It is therefore the intent of the Legislature that the State
of California assume a leadership role in measuring performance and
value in the health care system. By establishing the primary
statewide data and common measurement, and analyses of health care
costs, quality, and outcomes, and by providing sufficient revenues to
adequately analyze and report meaningful performance measures
related to health care costs, safety, and quality, the Legislature
intends to promote competition, identify appropriate health care
utilization, and ensure the highest quality of health care services
for all Californians.
   (h) The Legislature further intends to reduce duplication and
inconsistency in the collection, analysis, and dissemination of
health care performance information within state government and among
both public and private entities by coordinating health care data
development, collection, analysis, evaluation, and dissemination.
   (i) It is further the intent of the Legislature that the data
collected be used for the transparent public reporting of quality and
cost efficiency information regarding all levels of the health care
system, including health care service plans and health insurers,
hospitals and other health facilities, and medical groups,
physicians, and other licensed health professionals in independent
practice, so that health care plans and providers can improve their
performance and deliver safer, better health care more affordably; so
that purchasers can know which health care services reduce
morbidity, mortality, and other adverse health outcomes; so that
consumers can choose whether and where to have health care provided;
and so that policymakers can effectively monitor the health care
delivery system to ensure quality and value for all purchasers and
consumers.
   (j) The Legislature further intends that all existing duties,
powers, and authority relating to health care cost, quality, and
safety data collection and reporting under current state law continue
in full effect.
   128851.  As used in this chapter, the following terms have the
following meanings:
   (a) "Administrative claims data" means data that are submitted
electronically or otherwise to, or collected by, health insurers,
health care service plans, administrators, or other payers of health
care services and that are submitted to, or collected for, the
purposes of payment to any licensed health professional, medical
provider group, laboratory, pharmacy, hospital, imaging center, or
any other facility or person that is requesting payment for the
provision of medical care.
   (b) "Committee" means the Health Care Cost and Quality
Transparency Committee.
   (c) "Data source" means a licensed physician or any other licensed
health professional in independent practice, medical provider group,
health facility, health care service plan licensed by the Department
of Managed Health Care, health insurer certificated by the Insurance
Commissioner to sell health insurance, any state agency providing or
paying for health care or collecting health care data or
information, or any other payer for health care services in
California.
   (d) "Encounter data" means data related to treatment or services
rendered by providers to patients that may be reimbursed on a
fee-for-service statement.
   (e) "Group" or "medical provider group" means an affiliation of
physicians and other health care professionals, whether a
partnership, corporation, or other legal form, with the primary
purpose of providing medical care.
   (f) "Health facility" or "health facilities" means health
facilities required to be licensed pursuant to Chapter 2 (commencing
with Section 1250) of Division 2.
   (g) "Licensed health professional in independent practice" means a
licensed health professional who is authorized to order or direct
health services for patients or who is eligible to bill Medi-Cal for
services. The term includes, but is not limited to, nurse
practitioners, physician assistants, dentists, chiropractors, and
pharmacists.
   (h) "Office" means the Office of Statewide Health Planning and
Development.
   (i) "Risk-adjusted outcomes" means the clinical outcomes of
patients grouped by diagnoses or procedures, that have been adjusted
for demographic and clinical factors.
   (j) "Secretary" means the Secretary of California Health and Human
Services.
   128852.  Any limitation on the addition of data elements pursuant
to Chapter 1 (commencing with Section 128675) shall be inapplicable
to the extent determined necessary to implement the responsibilities
under this chapter. All data collected by the office shall be
available to the committee and secretary for the purposes of carrying
out their responsibilities under this chapter. The office shall make
available to the committee any and all data files, information, and
staff resources as may be necessary to assist in and support the
responsibilities of the committee.

      Article 2.  Health Care Cost and Quality Transparency Committee



   128855.  There is hereby created in the California Health and
Human Services Agency the Health Care Cost and Quality Transparency
Committee, composed of 16 members. The appointments shall be made as
follows:
   (a) The Governor shall appoint 10 members as follows:
   (1) One researcher with experience in health care data and cost
efficiency research.
   (2) One representative of private hospitals.
    (3) One representative of public hospitals.
    (4) One representative of an integrated multispecialty medical
group.
   (5) One representative of health insurers or health care service
plans.
   (6) One representative of licensed health professionals in
independent practice.
   (7) One representative of large employers that purchase group
health care coverage for employees and who is not also a supplier or
broker of health care coverage.
   (8) One representative of a labor union.
   (9) One representative of employers that purchase group health
care coverage for their employees or a representative of a nonprofit
organization that demonstrates experience working with employers to
enhance value and affordability of health care coverage.
   (10) One representative of pharmacists.
   (b) The Senate Committee on Rules shall appoint three members as
follows:
   (1) One representative of a labor union.
   (2) One representative of consumers with a demonstrated record of
advocating health care issues on behalf of consumers.
   (3) One representative of physicians and surgeons who is a
practicing patient-care physician licensed in the State of
California.
   (c) The Speaker of the Assembly shall appoint three members as
follows:
   (1) One representative of consumers with a demonstrated record of
advocating health care issues on behalf of consumers.
   (2) One representative of small employers that purchase group
health care coverage for employees and who is not also a supplier or
broker in health care coverage.
   (3) One representative of a nonprofit labor-management purchaser
coalition that has a demonstrated record of working with employers
and employee associations to enhance value and affordability in
health care.
   (d) The following members shall serve in an ex officio, nonvoting
capacity:
   (1) The Executive Officer of the California Public Employees
Retirement System or his or her designee.
   (2) The Director of the Department of Managed Health Care or his
or her designee.
   (3) The Insurance Commissioner or his or her designee.
   (4) The Director of the Department of Public Health or his or her
designee.
   (5) The Director of the State Department of Health Care Services
or his or her designee.
   (e) The Governor shall designate a member to serve as chairperson
for a two-year term. No member may serve more than two, two-year
terms as chairperson. All appointments shall be for four-year terms;
provided. However, the initial term shall be two years for members
initially filling the positions set forth in paragraphs (1), (2),
(4), and (6) of subdivision (a), paragraph (2) of subdivision (b),
and paragraph (2) of subdivision (c).
   128856.  The committee shall meet at least once every two months,
or more often, if necessary to fulfill its duties.
   128857.  The members of the committee shall receive reimbursement
for any actual and necessary expenses incurred in connection with
their duties as members of the committee.
   128858.  The secretary shall provide or contract for
administrative support for the committee.
   128859.  The committee shall do all of the following:
   (a) Develop and recommend to the secretary the health care cost
and quality transparency plan, as provided in Article 3 (commencing
with Section 128865).
   (b) Monitor the implementation of the health care cost and quality
transparency plan.
   (c) Issue an annual public report, on or before March 1, on the
status of implementing this chapter, the resources necessary to fully
implement this chapter, and any recommendations for changes to the
statutes, regulations, or the transparency plan that would advance
the purposes of this chapter.
   128860.  (a) The committee shall appoint at least one technical
committee, and may appoint additional technical committees as the
committee deems appropriate, and shall include on each technical
committee academic and professional experts with expertise related to
the activities of the committee.
   (b) (1) The committee shall appoint at least one clinical advisory
panel and may appoint additional panels specific to issues that
require additional or different clinical expertise. Each clinical
panel shall contain a majority of clinicians with expertise related
to the activities of the committee and any issue under consideration
and shall also include experts in collecting and reporting data. Each
clinical panel shall also include two members of the committee, one
of whom shall be a representative of hospitals or health
professionals and the other of whom shall be a representative of
consumers, purchasers, or labor unions.
   (2) For the initial plan, the committee shall appoint at least one
advisory clinical panel that shall do all of the following:
   (A) Issue a written report of recommendations to implement the
goals set forth by the committee, including how to measure quality
improvement, necessary data elements, and appropriate risk-adjustment
methodology. The report shall be submitted to the committee within
the time period specified by the committee. The committee shall
either adopt the recommendations of the clinical panel or, by a
two-thirds vote of the committee, reject the recommendations. If the
committee rejects the recommendations, it shall issue a written
finding and rationale for rejecting the recommendations, and shall
refer the issue back to the clinical panel and request additional or
modified recommendations in specific areas in which the committee
found the recommendations deficient.
   (B) Make recommendations to the committee concerning the specific
data to be collected and the methods of collection to implement this
chapter, assure that the results are statistically valid and
accurate, and state any limitations on the conclusions that can be
drawn from the data.
   (C) Make recommendations concerning the measures necessary to
implement the reporting requirements in a manner that is cost
effective, reasonable for data sources, and is reliable, timely, and
relevant to consumers, purchasers, and health providers.
   (c) The members of the technical committees and clinical advisory
panels shall be reimbursed for any actual and necessary expenses
incurred in connection with their duties as members of the technical
committee or clinical advisory panel.
   (d) The committee shall provide opportunities for participation
from consumers and patients as well as purchasers and providers at
all committee meetings.
   128861.  The committee, technical committee, and clinical advisory
panel members, and any contractors, shall be subject to the
conflict-of-interest policy of the California Health and Human
Services Agency.

      Article 3.  Health Care Cost and Quality Transparency Plan


   128865.  (a) (1) The committee, within one year after its first
meeting, shall develop and recommend to the secretary an initial
health care cost and quality transparency plan.
   (2) The committee shall periodically review and recommend updates
to the Health Care Cost and Quality Transparency Plan. The committee
shall conduct a full review every three years, and any
recommendations resulting from the review shall be subject to Section
128866.
   (3) The initial plan and updates to the plan shall result in
public reporting of safety, quality, and cost efficiency information
on the health care system. The purpose of the plan shall be to
improve health care cost efficiency, improve health system
performance, and promote quality patient outcomes.
   (4) In developing the initial plan and updates to the plan, the
committee shall review existing data gathering and reporting,
including existing voluntary efforts.
   (5) In developing the initial plan and updates to the plan, the
committee shall obtain the recommendation of the relevant clinical
panel or panels, if any, on the measures to be reported.
   (b) The plan shall include, but not be limited to, strategies to
do all of the following:
   (1) Measure and collect data related to health care safety and
quality, utilization, health outcomes, and cost of health care
services from health plans and insurers, medical groups, health
facilities, and licensed health professionals.
   (2) Measure each of the performance domains, including, but not
limited to, safety, timeliness, effectiveness, efficiency, quality,
and other domains as appropriate.
   (3) Develop a valid methodology for collecting and reporting cost
and quality information to ensure the integrity of the data and
reflect the intensity, cost, and scope of services provided, and that
the data are collected from the most appropriate data source.
   (4) Measure and collect data related to disparities in health
outcomes among various populations and communities, including racial
and ethnic groups.
   (5) Use and build on existing data collection standards, methods,
and definitions to the greatest extent possible to accomplish the
goals of this article in an efficient and effective manner including
the data collected by the state and federal governments.
   (6) Incorporate and utilize administrative claims data to the
extent it is the most efficient method of collecting valid and
reliable data.
   (7) Improve coordination, alignment, and timeliness of data
collection, state and federal reporting practices and standards, and
existing mandatory and voluntary measurement and reporting activities
by existing public and private entities, taking into account the
reporting burden on providers.
   (8) Provide public reports, analyses, and data on the health care
quality, safety, and performance measures of health plans and
insurers, medical groups, health facilities, licensed physicians, and
other licensed health professionals in independent practice, that
are accurate, statistically valid, and descriptive of how the data
were derived.
   (9) Maintain patient confidentiality consistent with federal and
state medical and patient privacy laws.
   (10) Coordinate and streamline existing related data collection
and reporting activities within state government.
   (11) Participate in the monitoring of plan implementation,
including a timeline and prioritization of the planned data
collection, analyses, and reports.
   (12) Participate in the monitoring of data collection, continuous
quality improvement, and reporting functions.
   (13) Assess compliance with data collection requirements needed to
implement this chapter.
   (14) Recommend a fee schedule sufficient to fund the
implementation of this chapter.
   (c) The secretary may contract with a qualified public or private
agency or academic institution to assist in the review of existing
data collection programs or to conduct other research or analysis
deemed necessary for the committee or secretary to complete and
implement the Health Care Cost and Quality Transparency Plan or to
meet the obligations of this chapter.
   128866.  (a) Within 60 days of receipt of the Health Care Cost and
Quality Transparency Plan recommended by the committee, the
secretary shall do one of the following:
   (1) Advise the committee that the recommended plan is accepted and
implementing regulations shall be drafted and submitted to the
Office of Administrative Law pursuant to the Administrative
Procedures Act, Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code.
   (2) Refer the plan back to the committee and request additional or
modified recommendations in specific areas in which the secretary
finds the plan is deficient. If referred back to the committee, the
secretary shall respond to any modified recommendation in the manner
provided in this section.
   (b) Every six years after implementation, commencing with 2014,
the secretary shall report to the Legislature on the work of the
committee and whether the committee should be continued in the manner
described in this article or whether changes should be made to the
law.

      Article 4.  Implementation of the Health Care Quality and
Transparency Plan


   128867.  (a) After acceptance of the plan pursuant to Section
128866, the secretary shall be responsible for timely implementation
of the approved plan. The secretary shall ensure timely
implementation by the office, which shall include, but not be limited
to, all of the following:
   (1) Provide data, information, and reports as may be required by
the committee to assist in its responsibilities under this chapter.
   (2) Determine the specific data to be collected and the methods of
collection to implement this chapter, consistent with the approved
plan, and ensure that the results are statistically valid and
accurate, as well as risk-adjusted, where appropriate.
   (3) Determine the measures necessary to implement the reporting
requirements in a manner that is cost effective and reasonable for
data sources, and is timely, relevant, and reliable for consumers,
purchasers, and providers.
   (4) Collect the data consistent with the data reporting
requirements of the approved plan, including, but not limited to,
data on quality, health outcomes, cost, and utilization.
   (5) Audit, as necessary, the accuracy of any or all data submitted
to the lead agency pursuant to this chapter.
   (6) Seek to establish agreements for voluntary reporting of health
care claims and data from any and all health care data sources that
are not subject to mandatory reporting pursuant to this chapter, in
order to ensure the most comprehensive systemwide data on heath care
costs and quality.
   (7) Fully protect patient privacy and confidentiality, in
compliance with federal and state privacy laws, while preserving the
ability to analyze data. Any individual patient information obtained
pursuant to this chapter shall be exempt from the disclosure
requirements of the Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).
   (8) Adopt the same procedures for health care providers as those
specified in Section 128750 and adopt substantially similar
procedures for other data sources to ensure that all data sources
identified in any outcome report have a reasonable opportunity to
review, comment on, and appeal any outcome report in which the data
source is identified before it is released to the public.
   (b) The secretary and office shall consult with the committee in
implementing this chapter, and shall cooperate with the committee in
fulfilling the committee's responsibility to monitor implementation
activities.
   (c) All state agencies shall cooperate with the secretary and the
office to implement the Health Care Cost and Quality Transparency
Plan approved by the secretary.
   (d) The secretary or the office shall adopt regulations as are
necessary to carry out the requirements of this chapter.
   128868.  Nothing in this chapter shall be construed to authorize
the disclosure of any confidential information concerning contracted
rates between health care providers and payers or any other data
source, but nothing in this section shall prevent the disclosure of
information on the relative or comparative cost to payers or
purchasers of health care services, consistent with the requirements
of this chapter.
   128869.  (a) Patient social security numbers and any other data
elements that the office believes may be used to determine the
identity of an individual patient shall be exempt from the disclosure
requirements of the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).
   (b) No person reporting data pursuant to this section shall be
liable for damages in any action based on the use or misuse of
patient-identifiable data that has been mailed or otherwise
transmitted to the office pursuant to the requirements of this
chapter.
   (c) No communication of data or information by a data source to
the committee, the secretary, or the office shall constitute a waiver
of privileges preserved by Section 1156, 1156.1, or 1157 of the
Evidence Code or Section 1370.
   (d) Information, documents, or records from original sources
otherwise subject to discovery or introduction into evidence shall
not be immune from discovery or introduction into evidence merely
because they were also provided to the committee or office pursuant
to this chapter.
   128870.  The office shall solicit input from interested
stakeholders and convene meetings to receive input on the creation of
a fee schedule to implement this section. This stakeholder process
shall occur in a manner that allows for meaningful review of the
information and fiscal projections by the interested stakeholders.
After the stakeholder process has been convened and used in the
development of a proposal, the office shall provide the secretary
with a proposal that will, to the extent possible, identify a fee
schedule and other financial resources for the implementation of this
chapter and allow for the recovery of costs of implementing
centralized data collection, and effective analysis and reporting
activities under this chapter.
   (b) The schedule of fees, including specific fees charged to each
data source and user, shall be approved by the Legislature and
Governor in the annual Budget Act. The annual budget of the committee
shall be presented and justified to the Legislature with an annual
work plan including a description of the data sources, data,
elements, use of the data, and the number and frequency of reports to
be made available.
   (c) The total amount of fees charged by the office to a hospital
to recover the costs of implementing this chapter, and the fees
charged to that hospital pursuant to Section 127280 shall not exceed
0.06 percent of the gross operating cost of the hospital for the
provision of health care services for its last fiscal year that ended
on or before June 30 of the preceding calendar year.
   128871.  There is hereby established in the State Treasury the
Health Care Cost and Quality Transparency Fund to support the
implementation of this chapter. All fees and contributions collected
by the office pursuant to Section 128870 shall be deposited in this
fund and used to support the implementation of this chapter.
Expenditures shall be subject to appropriation in the annual Budget
Act.