Less Hidden Information by Exchange Under New Bill

The Senate Committee on Health this week unanimously approved a bill requiring the state’s new health insurance exchange to divulge more contracting information to the public.

Current rules allow Covered California to keep contracts confidential for a year and to conceal financial data indefinitely. The exchange also has authority to conceal other information dealing with negotiations and some meeting minutes.

Under SB 332 by Sen. Bill Emmerson (R-Redlands) and Sen. Mark DeSaulnier (D-Concord) non-financial contract information would be required to be reported a year after contracts are granted and financial information would be required to be publicly available after four years.

Emmerson told the committee Wednesday his legislation was sparked by a newspaper story that pointed out how disclosure exemptions could lead to a lack of oversight in the spending of public monies.

“This issue came to my attention in May of this year when an Associated Press article was published highlighting how current law grants the health care exchange, or Covered California, broad exemptions from the California Public Records Act,” Emmerson said Wednesday. He said the exemptions “are unique in comparison with other state agencies.”

According to Covered California spokesperson Larry Hicks the board will spend more than $761 million in federal grant money this year, both on contracts and in working with other state departments.

Emmerson said the Managed Risk Medical Insurance Board’s  financial disclosure policy for the Healthy Families program was a model for the legislation.

Sen. Ed Hernandez (D-West Covina), chair of the Senate Committee on Health, said SB 332 is another layer of checks and balances for Covered California.

“Covered California is currently transparent, but we wanted to make sure it was written into statute,” Hernandez said following the 9-0 vote. “I’m supportive of anything to do with transparency when it comes to the public’s right to information.”

Emmerson said SB 332 was not penalizing Covered California for any wrongdoing.

“This bill is not a negative comment on the exchange’s leadership,” he said. “It seeks to codify the exchange’s current practice and to ensure that, in the future, sunshine is protected.”

Jerry Jeffe, public policy director for the California Chronic Care Coalition, supported the bill, but said it should go farther. He said, for example, the process Covered California used to award 48 education and outreach grants leading to the launch of the exchange should be more transparent. The board awarded $37 million in grants last month.

“We supported this legislation creating the exchange, but none of us were paying attention to the privacy provisions built in,” Jeffe said. “What sparked our interest were the grants announced a few weeks ago. We know that there were some organizations that asked to see the scores and rating sheets for them and were denied access.”

Jeffe said California Chronic Care Coalition was one of the organizations denied grant funding for community health care outreach and education.

Taylor Sugere of California Common Cause also spoke in support of SB 332.

“By making Covered California adhere to all aspects of the California Public Records Act, SB 332 promotes transparency and ensures that California is a leader in Affordable Care Act implementation,” Sugere said. “California Common Cause believes that the health benefit exchange should not be exempt from future problems with disclosure and transparency standards applied to other agencies.”

SB 332 also creates further legislative oversight. Emmerson said the Joint Committee on Legislative Audit would be able to audit the exchange if necessary.

“I want to stress that Covered California’s current practice is consistent with the Public Records Act,” Emmerson said. “They have so far complied with the public’s request for information. Regardless, this bill is still necessary to guarantee transparency in the upcoming years.”