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AP Exclusive: Calif. exchange granted secrecy

By Michael R. Blood

Associated Press

Published: Thursday, May 9 2013 12:37 p.m. MDT

In response to an AP public records request, the agency released information on a dozen competitively bid contracts issued since early 2011. They included $14 million for a 19-month contract with Ogilvy Public Relations for marketing and other services; $400,000 for Pricewaterhouse Coopers for a four-month deal developing a small business program; and $327 million for a five-year deal with consulting giant Accenture to develop a web portal and enrollment system for those who will seek coverage.

Those contracts also are accessible on the agency's website, along with about two dozen requests for services the agency has published. But it's not clear how many contracts the agency has executed, for how much or with whom. Staff counsel Gabriel Ravel said in an email that the agency "exercised its discretion to waive this exemption" for the contracts it released to AP. However, "all other existing contracts are confidential and privileged," he wrote.

The closeted spending was quietly authorized in a bundle of amendments added to the bill just days before it was passed by the Senate and Assembly during a blitz of activity in August 2010, when California was sprinting to become the first state to embrace the most extensive health care changes since Medicare.

Legislative staffers who worked on the technical language in the bill discussed the possibility of limiting the scope of the records exemption but settled on making it comprehensive after concluding it was not practical to try to determine what should be left out.

No public hearing was held on the provision because legislative leaders did not consider it substantive enough to send the bill back to committee for an airing, according to the office of Assembly Speaker John Perez, D-Los Angeles.

Statements issued to the AP by his office said the bill met the constitutional test and "contains the relevant findings," while striking a practical balance between the need for confidential rate negotiations with medical plans and a board that meets in public and is covered by open-meetings law.

"At the time of the drafting of the bill in 2010, this was a non-controversial, technical provision modeled on the same exemption long provided to successful government health insurance programs, including the state's Healthy Families Program," one statement said.

Perez's account that there was agreement on the confidentiality rules in the Senate Health Committee was disputed by former Sen. Sam Aanestad, a Republican on the panel who said he opposed those blanket privacy rules as well as the broader bill creating the exchange.

"This is such an untested field, there has to be strict illumination and oversight from day one," said the retired oral surgeon. Empowering bureaucrats to make unilateral decisions on access to contracting records "bodes for disaster."

Associated Press writers Steve LeBlanc in Boston, Barry Massey in Santa Fe, N.M., John Miller in Boise, Idaho, and Brian Witte in Annapolis, Md., contributed to this report.

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