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F I S C A L I M P A C T R E P O R T
SPONSOR Anderson
ORIGINAL DATE
LAST UPDATED
01/29/08
HB 522
SHORT TITLE Electronic Medical Records Act
SB
ANALYST Hanika-Ortiz
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY08
FY09
$0.1 (see narrative) Recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
Relates to Appropriation in the General Appropriation Act
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY08
FY09
FY10 3 Year
Total Cost
Recurring
or Non-Rec
Fund
Affected
Total
$.01
Recurring Various
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Department of Health (DOH)
Health Policy Commission (HPC)
New Mexico Corrections Department (NMCD)
SUMMARY
Synopsis of Bill
House Bill 522 enacts the Electronic Medical Records Act which authorizes the creation, use and
maintenance of electronic medical records; provides for individual rights with respect to the
disclosure of information contained in electronic medical records, provides for the protection of
privacy of electronic medical records, and, establishes penalties for the misuse of electronic
medical records.
Specific provisions within the bill include:
pg_0002
House Bill 522 – Page
2
Sections 1, 2 and 3 site the title and the purpose of the act; and, provides for definitions as used
within the act.
Sections 4 and 5 require the New Mexico Telehealth and Health Information Technology
Commission (THITC) to first develop and present a plan to the DOH for the implementation of
medical electronic claims and submissions by June 9, 2009; and, develop and present a plan to
the DOH for the implementation of an electronic medical records system for use and exchange of
information by June 1, 2010 for all health care providers, health care institutions and health
insurance companies doing business in New Mexico. All implementation plans will be presented
to the Governor and the legislature by the DOH and the THITC regarding all specific legislation
or necessary appropriations.
Section 6 establishes provisions recognizing the legal equivalent of electronic records and
signatures.
Section 7 includes provision to require an electronic medical record or electronic signature to be
attributable to an individual if it was the act of the individual.
Section 8 provides that a notarized signature for a medical record is satisfied if the electronic
signature is logically associated with the medical record or signature pertaining to the medical
record.
Section 9 extends the current medical record retention requirements to electronic medical
records.
Section 10 includes provisions that electronic medical records and electronic signatures are not
to be excluded in evidentiary proceedings solely because they are in electronic form.
Section 11 includes detailed provisions focused on the disclosure of health care information from
an individual’s electronic medical record; and, includes provisions for how an individual might
choose to exclude information from such disclosure.
Section 12 would establish guidance as stated in Section 11 for both in-state and out-of-state
disclosure of information.
Section 13 provides for the rights of persons that are authorized to consent to health care for
another, to have the same rights and powers related to that information under the Electronic
Medical Records Act. Includes the same rights and protections for emancipated minors.
Section 14 allows for the disclosure of medical record information for the purpose of research in
accordance with federal regulations.
Section 15 includes provisions for penalties for misuse of electronic medical records.
FISCAL IMPLICATIONS
The Executive is requesting a FY08 and FY09 special appropriation of $1.3 million for start-up
costs associated with establishing and transitioning to a health coverage authority as proposed in
HB 62; and, for the initial electronic health transactions planning work as described in House
pg_0003
House Bill 522 – Page
3
Bills 37 and 522. It is unclear what portion of this special appropriation will be solely directed
toward this planning work; and, what entity will be directed to administer the funding.
The activities within this bill have the potential to require annual General Fund appropriations
not only for start-up costs and maintenance of a statewide system for electronic submissions, but
also for any extensive training and on-going technical support needs of users statewide.
NMCD reports that one of the duties of the TNIFC is to realistically assess cost implications for
all health care providers, including contract medical providers of prison inmates.
SIGNIFICANT ISSUES
The provisions within HB 522 include the fourth component of the Governor’s
HealthSOLUTIONS initiative;
and, are an attempt to control costs and increase health care
quality through electronic medical claims and submissions, and electronic medical records.
The
bill tasks the DOH and THITC with making recommendations to the Governor and the
Legislature in FY09 and FY10 regarding future appropriations or specific legislation needed to
implement a statewide electronic medical claims and submission, and electronic medical records
system.
A little less than 25% of office-based physicians nationwide have gone digital, and only 10%
write their prescriptions electronically according to the most recent Center for Disease Control
data. Health care providers have reported that the primary barriers to health information
technology adoption are high initial acquisition and implementation costs and the disruptive
effects on their practices during implementation.
PERFORMANCE IMPLICATIONS
The HPC reports that the NMHIC is an effort by public and private health systems, insurers and
employers in New Mexico to develop a common, electronic, health information exchange
network. NMHIC will address both urban and rural areas of New Mexico in its initial three-year
phase, specifically the Albuquerque Metropolitan area and the Taos community.
ADMINISTRATIVE IMPLICATIONS
DOH reports the bill supports the Department’s strategy of expanding the use of electronic
medical records.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
Duplicates HB 37
Companion to HB 62: the HealthSOLUTIONS Act
Relates to SB 3: Health Security Act, which also includes requirements for electronic records
Relates to the Executive General Fund Budget Recommendation that includes $909.2 thousand
for Information Technology Investment in Telehealth & Electronic Health Transactions in FY09
pg_0004
House Bill 522 – Page
4
TECHNICAL ISSUES
DOH recommends providing a definition of “health care insurance company" to further clarify if
all underwriters of health care, including self-insurance plans, would be included in the
provisions of the bill.
The data from an electronic health records system should be able to be used anonymously for
statistical reporting for purposes of quality improvement, outcome reporting, resource
management, and public health communicable disease surveillance. It is unclear whether this
provision is provided for within the bill.
Section 14 could include an exemption for the purpose of “organ and tissue donation".
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
A statewide electronic medical claims submission and electronic medical records implementation
plan will not be initiated by way of this bill.
QUESTIONS
Will there be the ability to exchange medical information with providers in other states that do
not have electronic medical record or electronic claims submission capability.
Will the bill hold up to HIPAA regulations regarding preservation of privacy information.
Is it anticipated that there will be emotional costs for older providers who are not comfortable
with the information technology age. Could these providers be discouraged from continuing to
care for patients and leave or close their practices.
Could the cost to implement a computerized system push fixed costs for small providers beyond
current reimbursement rates.
AHO/bb