LOS ANGELES (AP) — A California law that created an agency to oversee Patient Protection and Affordable Care Act (PPACA) changes granted it sweeping authority to conceal spending on the contractors that will perform most of its functions.
The degree of secrecy afforded Covered California appears unique among states attempting to establish their own health insurance exchanges under PPACA.
An Associated Press review of the 16 other states that have opted for state-run exchanges, or health insurance “marketplaces,” shows the California agency was given powers that are the most restrictive in what information is required to be made public.
In Massachusetts, the state that served as the model for Obama’s health overhaul, its Health Connector program is specifically covered by open-records laws, rather than providing exemptions from them, as is the case for contracting in California.
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In Idaho, where its exchange was established as a private, nonprofit corporation, and in New Mexico, agencies specifically must comply with open-records laws. The Maryland Legislature subjected its exchange to the state’s public information act, but protected some types of commercial and financial information.
In California’s case, the exclusions may run afoul of the state constitution, one legal expert said. Exchange spokesman Dana Howard said the agency complies with the law but declined to discuss in detail how it determines what is public and what is not.
“I’m not going to go down item by item, about how it is and what kinds of meetings and what was talked about,” he said.
It’s routine in government to keep bids secret until contracts are awarded, so one vendor does not get an unfair advantage over others. After a bid is awarded, contracts generally become fully public.
In setting up the California exchange, lawmakers gave it the authority to keep all contracts private for a year and the amounts paid secret indefinitely. “Except for the portion of a contract that contains the rates of payment, contracts entered into pursuant to this title shall be open to inspection one year after their effective dates,” reads the code specifying what exchange records are exempt from public disclosure.
According to agency documents, Covered California plans to spend nearly $458 million on outside vendors by the end of 2014, covering lawyers, consultants, public relations advisers and other functions.
Other exchange records that are allowed to be kept secret include those that reveal recommendations, research, strategy of the board or its staff, or those that provide instructions, advice or training to employees. Minutes of the board meetings also are exempt from disclosure.
The indefinite ban on releasing rates of pay to companies and individuals receiving contracts also goes beyond exemptions for other state health programs, such as Healthy Families, which withholds rates of pay from disclosure for up to four years, but not permanently.
If the Legislature wants to limit access, the state constitution requires that it produce findings that demonstrate the need for shielding information from the public. In the bill that authorized the exchange, the Legislature devoted two sentences to address that issue. It argued the cloaked spending was “necessary” to protect “powers and obligations to negotiate on behalf of the public.”
Those provisions are vulnerable to being declared unconstitutional, said Terry Francke, head of Californians Aware, a group that promotes government transparency. He said the Legislature simply made a statement in the law, with no details or evidence to support it.