2010 California Code
Health and Safety Code
Division 109.5. California Health Information Technology And Exchange Act

130250.  The Legislature finds and declares all of the following:
   (a) Health information technology provides tools that can improve
the quality, safety, and value of health care services. However, the
full benefit of health information technology cannot be realized
until electronic health record systems supporting the secure exchange
of individual health records are in place and used by health care
providers, payers, patients, and other individuals throughout the
state, and across state boundaries.
   (b) There is a need to promote secure electronic health data
exchange among payers, health care providers, consumers of health
care, researchers, and governmental agencies.
   (c) Health information exchange necessarily includes the sharing
of private health records and information of individuals.
Establishing the security of individual privacy rights and
confidentiality of personal health and medical records is of
paramount importance to creating public confidence in any broad-based
electronic health records system. Ensuring transparent
accountability, governance, and oversight are critical components to
maintaining the public's trust.
   (d) The American Recovery and Reinvestment Act of 2009 (ARRA)
(Public Law 111-5) includes within it the Health Information
Technology for Economic and Clinical Health Act (the HITECH Act). The
HITECH Act provides an unprecedented opportunity for California to
develop a statewide health information technology infrastructure to
improve California's health care system. It includes provisions and
federal funding to encourage the adoption and meaningful use of
health information technology and exchange.
   (e) Section 3013 of ARRA provides federal grant funds to
facilitate and expand the electronic movement and use of health
information among organizations according to nationally recognized
standards.
   (f) Lack of a timely and available health information exchange
jeopardizes the ability of the state and providers to access
available federal Medicaid and Medicare incentive payments.



130250.1.  (a) This division shall be known, and may be cited, as
the California Health Information Technology Act.
   (b) Any duties under the act are subject to the availability of
sufficient funding to carry out the duties. The provisions of this
act shall only be implemented to the extent permitted by federal law.




130251.  (a) The California Health and Human Services Agency or one
of the departments under its jurisdiction may apply for federal funds
made available through the federal American Recovery and
Reinvestment Act of 2009 (Public Law 111-5) for health information
technology and exchange. If the California Health and Human Services
Agency or one of the departments under its jurisdiction submits an
application pursuant to this subdivision, and later chooses to
subgrant, in whole or in part, a portion of the federal grant to a
qualified nonprofit entity for the purposes of establishing health
information exchange, that entity shall be designated as the state
governance entity.
   (b) In the event that the California Health and Human Services
Agency or one of the departments under its jurisdiction elects not to
submit an application described in subdivision (a), the Governor
shall designate a qualified nonprofit entity to be the
state-designated entity for the purposes of health information
exchange, pursuant to the requirements set forth in the federal
American Reinvestment and Recovery Act of 2009.
   (c) In addition to existing requirements applicable to nonprofit
entities, the state governance entity may be held to additional
requirements under federal and state law, and directives from the
California Health and Human Services Agency.
   (d) The agency or state-designated entity shall execute tasks
related to accessing federal stimulus funds made available through
ARRA, and facilitate and expand the use and disclosure of health
information electronically among organizations according to
nationally recognized standards and implementation specifications
while protecting, to the greatest extent possible, individual privacy
and the confidentiality of electronic medical records.
   (e) The agency or state-designated entity shall develop strategic
and operational plans to ensure that health information exchange
capabilities are available, adopted, and utilized statewide so that
patients do not experience disparities in access to the benefits of
this technology by age, race, ethnicity, language, income, insurance
status, geography, or otherwise.
   (f) The agency, state-designated entity, or state governance
entity shall create a plan for a self-sustaining funding mechanism
that does not include use of General Fund moneys that shall cover all
reasonable costs of the administration of health information
exchange when federal ARRA funds expire or are exhausted. A detailed
business plan and sustainability model shall be submitted to the
Governor and the Legislature by April 1, 2011. The plan may include a
combination of approaches to create viable revenue streams, and
shall take into account the needs of safety net institutions and
providers.
   (g) The state-designated entity or state governance entity shall
continually meet any conditions for being so designated as determined
by the Secretary of California Health and Human Services. Failure to
comply with this subdivision may result in the applicable entity
losing its contract for state designation or subgrant agreement.
   (h) As a condition of receiving the contract for state designation
or subgrant agreement, the state-designated entity or state
governance entity shall comply with all of the following
requirements:
   (1) It shall be subject to oversight by the California Health and
Human Services Agency.
   (2) (A) It shall be governed by an initial board with a diverse
composition from multiple types of organizations from multiple
regions throughout the state. The initial governing board shall
include all of the following:
   (i) The Secretary of California Health and Human Services or his
or her designee.
   (ii) The Chair of the Senate Committee on Health or his or her
designee.
   (iii) The Chair of the Assembly Committee on Health or his or her
designee.
   (iv) One administrator from a state department under the
jurisdiction of the California Health and Human Services Agency
responsible for a statewide health program.
   (v) At least two consumer representatives, one of whom shall have
expertise in privacy and security of health information.
   (vi) One licensed physician and surgeon, representing a solo or
small group practice.
   (vii) One licensed physician and surgeon, representing a medical
group or independent practice association.
   (viii) One representative from a safety net clinic.
   (ix) Two representatives of hospitals, one of whom shall represent
a public hospital.
   (x) Two representatives of health plans or health insurers, one of
whom shall represent a publicly run health plan or insurer.
   (xi) One local public health officer.
   (xii) Two representatives of health information exchange
organizations, one from northern California, and one from southern
California.
   (xiii) One representative of the medical informatics industry or
who has experience in medical informatics.
   (xiv) One representative of an employer who provides employees
with health care coverage, or a group purchaser of health care
coverage.
   (xv) One representative from labor.
   (xvi) The chief executive officer of the nonprofit entity.
   (xvii) Two at-large cochairs of the nonprofit entity.
   (B) The majority of the board shall be comprised of
nongovernmental employees.
   (3) If the governing board convenes workgroups or subcommittees,
the workgroups or subcommittees shall be comprised of representatives
from multiple types of organizations from multiple regions
throughout the state, and meetings of any workgroup or subcommittee
shall be held in an open, public, and transparent way.
   (4) The state-designated entity or state governance entity shall
have nondiscrimination and conflict-of-interest policies that
demonstrate a commitment to open, fair, and nondiscriminatory
participation by stakeholders.
   (i) The California Health and Human Services Agency, in
consultation with the initial governing board, may modify the
composition of the initial governing board. If a modification is made
to the composition of the initial governing board pursuant to this
subdivision, the agency shall inform the Legislature of, and the
reason for, the change implemented.
   (j) Upon the completion of the initial one-year term of the two
at-large cochairs of the state-designated entity or state governance
entity, the board shall select a chair or two cochairs from its
membership.



130251.15.  (a) All deliverables, as defined in the scope of work
originated or prepared by the state-designated entity or state
governance entity pursuant to its applicable contract, including
papers, reports, charts, and other documentation, but not including
the applicable entity's administrative communications and records
relating to the contract, shall, upon delivery and acceptance by the
California Health and Human Services Agency, become the exclusive
property of the state, and may be copyrighted by the state under the
oversight of the agency.
   (b) If any material funded pursuant to the contract may be
copyrighted, the agency reserves the right to copyright the material,
and the entity agrees not to copyright the material without prior
written approval from the Secretary of California Health and Human
Services. The secretary shall consent to, or give a reason for the
denial to, the entity in writing within 60 days of receipt of the
request.
   (c) If the material is copyrighted with the consent of the agency,
the agency reserves a royalty-free, nonexclusive, and irrevocable
license to reproduce, prepare derivative works, publish, distribute,
and use the materials, in whole or in part, and to authorize others
to do so, provided written credit is given to the author.
   (d) All inventions, discoveries, or improvements of the
techniques, programs, or materials developed pursuant to the contract
shall be the property of the agency. The agency agrees to grant a
royalty-free, nonexclusive license for any invention, discovery, or
improvement to the entity and further agrees that the entity may
sublicense additional persons on the same royalty-free basis subject
to the approval of the agency.
   (e) Nothing in this section shall be construed to limit the
intellectual property and copyright authority of the federal
government.



130252.  (a) Subject to available funding, the California Health and
Human Services Agency shall be responsible for ensuring that all
federal grant deliverables are met. The agency shall coordinate
electronic health activities in the state and work with stakeholders,
state departments, and the Legislature to support policy needs for
health information technology and health information exchange in
California.
   (b) In the event that a state governance entity is established,
all of the following conditions shall be met:
   (1) The agency shall be responsible for ensuring that all
deliverables established in the strategic and operational plans
established pursuant to subdivision (e) of Section 130251, and as
required by the federal grant, are met.
   (2) Any grant issued by the agency to the state governance entity
for health information exchange shall be deliverables based. All
deliverables shall be subject to approval and acceptance by the
agency.
   (c) The agency, state-designated entity, or the state governance
entity shall establish and begin providing health information
exchange services by January 1, 2012.
   (d) The state-designated entity or state governance entity shall
ensure that an effective model for health information exchange
governance and accountability is in place. In order to avoid any real
or apparent conflict of interest, the state-designated entity or
state governance entity shall ensure organizational and functional
separation exists between the governance functions of the entity and
its operational functions, specifically between operating entities
that are or may be involved in building and maintaining the health
information exchange. The agency shall conduct periodic internal
reviews at least once after an entity has received the designation,
and periodically as necessary, to ensure this separation is
maintained, and that the state-designated entity or state governance
entity operates in a manner that ensures organizational integrity and
accountability.
   (e) The state-designated entity or state governance entity shall
provide a process for public comment and input, which may include
integrating public workgroups convened by the agency during the
operational planning process into its organizational structure.
   (f) The state-designated entity or state governance entity, in
consultation with the Office of Health Information Integrity, shall
develop detailed standards and policies to be included in all
contracts with health care entities that are participants of the
state-designated entity's or governance entity's health information
exchange for health information exchange services provided by the
applicable entity. The state-designated entity or state governance
entity shall also work with the Office of Health Information
Integrity to ensure standardization of privacy and security policies
for health information exchange statewide. The state-designated
entity or state governance entity shall develop operational policies
based on privacy and security guidelines developed by the state, and
create a uniform set of privacy and security rules to be used by
other entities participating in health information exchanges
established by the state-designated entity or state governance entity
for health information exchange or a contract made by the applicable
entity for health information exchange.
   (g) The agency shall develop a detailed implementation plan that
meets all requirements, deliverables, and goals specified in the
strategic and operational plans established pursuant to subdivision
(e) of Section 130251. The implementation plan shall be submitted to
the Legislature by November 1, 2010. The implementation plan shall
include, but need not be limited to, all of the following:
   (1) A detailed work plan and communications plan.
   (2) A model that defines the technical architecture for services
recommended in the operational plan.
   (3) A description of specific core services enabled or provided by
the health information exchange and timeframes for the rollout of
those services.
   (4) A determination of how to most effectively engage stakeholders
throughout the state.
   (5) A description of specific deliverables and timeframes to
ensure that statewide health information exchange is achieved
pursuant to the state strategic and operational plans.
   (6) Detailed information on internal infrastructure that ensures
the state governance entity for health information exchange meets
legal and regulatory criteria needed, including, but not limited to,
a comprehensive staffing plan.
   (h) Any contract for state designation or subgrant agreement
pursuant to this section shall be made through an open and
competitive process as required by federal law.
   (i) The state designated entity or state governance entity shall
comply with applicable provisions of the federal Health Information
Technology for Economic and Clinical Health Act (HITECH Act; Public
Law 111-5), the federal Public Health Service Act (42 U.S.C. Sec.
300x-26), and applicable federal policies, guidance, and
requirements. These provisions shall include, but are not limited to,
the requirement that funds be used to conduct activities to
facilitate and expand the electronic movement and use of health
information among organizations according to nationally recognized
standards in effect on December 31, 2010.



130253.  (a) To provide the public with transparency of the actions
by the state-designated entity or state governance entity, the
California Health and Human Services Agency shall require the
state-designated entity or state governance entity to develop
policies and procedures that include, but are not limited to, all of
the following areas:
   (1) Conflicts of interest. The policies and procedures shall be
consistent with federal law and modeled on the Political Reform Act
of 1974 (Title 9 (commencing with Section 81000) of the Government
Code).
   (2) Public access to meetings.
   (A) (i) The state-designated entity or state governance entity
shall hold board and workgroup meetings open to the public, including
the entity's annual meeting.
   (ii) The state-designated entity or state governance entity may
hold additional meetings as it determines are necessary or
appropriate. Subject to subparagraph (B), these meetings shall also
be open to the public.
   (B) The state governance entity may conduct closed sessions when
it meets to consider or discuss confidential matters, including, but
not limited to, those concerning the appointment, employment,
performance, compensation, or dismissal of the entity's officers and
employees.
   (C) The state-designated entity shall award grants and contracts
in public meetings consistent with federal requirements for an open
and competitive process, and shall adopt all governance, technical,
and policy standards in public meetings.
   (3) Contracts.
   (A) The Public Contract Code shall not apply to contracts issued
by the state governance entity. This subparagraph shall not be
construed to modify existing law regarding the application of the
Public Contract Code.
   (B) For contracts entered into by the state governance entity,
policies shall be governed by applicable federal regulations,
policies specified by the Office of the National Coordinator for
Health Information Technology, including, but not limited to,
provisions required by the federal State Health Information Exchange
Cooperative Agreement Program and any additional requirements as
specified by the agency.
   (b) The policies and procedures developed pursuant to this section
are exempt from the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code).



130254.  Notwithstanding Section 10231.5 of the Government Code,
commencing October 1, 2010, the California Health and Human Services
Agency shall report, by October 1 and April 1 of each year, to the
Legislature regarding the expenditures made from the California
Health Information Technology and Exchange Fund, and the status of
health information technology and exchange activities funded through
the fund. The report shall be in compliance with Section 9795 of the
Government Code. This report shall include, at a minimum, all of the
following:
   (a) The agency's evaluation of the extent to which the state
governance entity for health information exchange has completed each
deliverable outlined in grant agreements or contracts between the
state and the entity, and the extent to which deliverables were
completed within the timelines specified in the grant agreements or
contracts.
   (b) A detailed update on hiring and expenditures on staff hired
through this fund, including, but not limited to, staff hired by the
state governance entity for health information exchange.
   (c) The status and amounts of grants and contracts awarded by the
state governance entity for health information exchange, including,
but not limited to, descriptions and deliverables.



130255.  (a) In the event that the California Health and Human
Services Agency applies for and receives federal funds made available
through the federal American Recovery and Reinvestment Act of 2009
(Public Law 111-5) for health information technology and exchange, as
outlined in subdivision (a) of Section 130251, the California Health
Information Technology and Exchange Fund is hereby created in the
State Treasury.
   (b) All moneys in the California Health Information Technology and
Exchange Fund shall be available, upon appropriation by the
Legislature, for purposes related to health information technology
and exchange.
   (c) The California Health Information Technology and Exchange Fund
shall consist of, but is not limited to, federal funds made
available through ARRA for health information technology and
exchange. Notwithstanding Section 16305.7 of the Government Code, any
interest and dividends earned on deposits in the fund shall be
retained in the fund for purposes of this division.
   (d) It is the intent of the Legislature that the activities
associated with health information exchange be funded solely through
the following:
   (1) Federal funds.
   (2) Private contributions identified by the state, the
state-designated entity, or any relevant advisory panel convened by
the California Health and Human Services Agency.
   (3) Funds generated by the self-sustaining funding mechanism to be
established by the California Health and Human Services Agency or
one of its departments, or the state-designated entity.