State’s All-Payer Claims Database Still Far Short Of Lift-Off

Collaboration, Fiscal Sustainability Are Concerns

State's All-Payer Claims Database Still Far Short Of Lift-Off
Washington state's All-Payer Claims Database could help health care consumers more easily avoid "flying blind" on costs of medical procedures. But finding contractors to run the project is going slowly. Photo: Com Salud.

An All-Payer Claims Database for Washington sounded like such a good idea. After approving a constrained version of one in 2014, lawmakers approved plans for a meatier one last year.

The aim of the APCD is to improve transparency in the health care market by allowing consumers as well as health care providers to easily compare prices for procedures or treatment throughout the state, using the data collected.

The data would include all medical, pharmacy and dental claims from private and public payers in the state.

‘Better Information Will Result In A Better System’

“We all want a top-notch health care system that improves our families’ health at an affordable cost,” Governor Inslee said in a 2015 statement. “Better information will result in a better system.”

It’s still an appealing concept. But it’s taking a while to get from the idea to the execution.

And then some.

The Washington state Office of Financial Management (OFM) is overseeing the effort, and has hit the reset button in its search for a contractor to manage the effort.

They have also had setbacks writing procedures on how to handle data security in accordance with state and federal law.

And the APCD’s long-term sustainability under private sector management, as required, is an open question.

At a meeting last week OFM officials hashed out their new process for potential bidders after none of them put in a bid last year. The first process had used a Request For Proposal (RFP).

Now, there’s a new three-phase process beginning April 1 to replace any RFP framework. OFM said this allows for more communication between bidders and OFM. They plan to award a bid by June 20 and have the project completed by September 2017.

The meeting last week was also meant to bring together as many prospective partners as possible, as the bids for lead organization and data vendor are filed jointly.

The state issued an RFP October 29 last year for a lead organization to manage the database and a data vendor to collect all information. But by the December 22 deadline, no bid had been made.

As a result, OFM Assistant Director Marc Baldwin told lawmakers at a Washington State Senate Health Committee meeting in January they needed to make some changes on how the database is managed and implemented.

“The RFP process is a very blunt instrument” for “trying to get from here to there,” he said. “It does not allow a lot of dialogue with potential bidders about how they could make that (database) work.”

This was a problem Maine-based nonprofit Health Onpoint Data faced during the initial process. Testifying at the January hearing via phone, President Jim Harrison said they had trouble finding a lead organization with mutual interest in the project.

Along with changes to the bid process, there’s a newly-announced delay in crafting the APCD’s draft rules for ensuring state and federal privacy and data security laws are followed. On Wednesday OFM announced that a March 24 stakeholder meeting to review the draft privacy rules had been cancelled.

Consumer Data Needs To Be ‘Actionable, Not Just Interesting’

The consumer benefits could be considerable once the project is launched and fine-tuned. But health care industry experts also caution that database’s effectiveness depends on how well the information collected is interpreted and applied. That context is critical, said Sydney Smith Zvara, executive director at the Association of Washington Healthcare Plans.

“We need to end up with data that can be put together in a way that is actionable, not just interesting, and would allow folks to make choices,” she said. “It (APCD) can provide you with basic information about pricing, but to determine what it means to you, you need to apply the circumstances. It’s different if you’ve met your deductible than if you haven’t.”

Can The All-Payer Claims Database Pay For Itself? Unclear

Another concern of potential bidders was whether the ACPD could be financially self-sustaining, as required by state law.

The costs for setting up the APCD and its website are covered through a combined $2.5 million from Cycle III and Cycle IV federal grants from the Centers For Medicare and Medicaid Services.

The database project relies on fees and charges for access to the raw data collected. The law sets up levels of access that depend on entity making the request. For example, Baldwin said research teams would have a substantial level of access compared to others, and would pay for it. Those researchers might be in the healthcare industry and academia, and could include large employers seeking to tailor health care plans with providers or brokers.

The information would allow them to analyze trends in procedures and services by the location, population, and other demographics.

For the state, the APCD health data could be compared to performance measures they set up in 2014.

For consumers, the information offered on the website would be free.

Operating Costs Unclear Right Now

Sen. Randi Becker (R-2), Chair of the Senate Health Care Committee, told Lens the main objective is for patients to get access to the information, but there are worries about the APCD’s ability to be self-sustaining.

For example, OFM won’t know how much it will cost to run the database until it actually is set up.

Despite the setbacks, Baldwin told the Health Committee in January they’re not back to square one entirely.

“Our goal is to modify the approach as much as possible within existing statue and funding source,” he said. “We are not coming to you saying we need help on legislation, at least yet. We can think more creatively.”

The key issue, he added, was ensuring the federal funding continues beyond September. OFM is currently trying to get a no-cost extension of the grant, but Baldwin said they can’t even apply until 90 days before they expire.

If the no cost-extension for federal grants are denied, then OFM and the contractor would determine what could be accomplished before the grants expire.

However, he said that other states setting up APCDs are experiencing similar delays. Becker also expressed optimism that the grants will be extended.

The March 24 stakeholder meeting is intended to review OFM’s draft rules meant to ensure database information security and protect consumer privacy, a major concern for both lawmakers and health care providers leading to the passage of ESSB 5084 last year.

Big Privacy Concerns Around All-Payer Claims Database

Although they never took a stance on the APCD bill itself, the Washington Association of Health Care Plans conveyed to the legislature the “absolute need to protect privacy,” according to Zvara, of the Association of Washington Healthcare Plans.

“There needs to be really beefy security,” she said. “That’s a serious responsibility. That’s got to be paramount.”

OFM is currently working on the draft privacy rules but won’t be able to hit their April 4 deadline for filing them due to the complexity of the relevant state and federal laws.

One of the problems is that they are required to receive input from the contractor managing the APCD. In an email, OFM officials said certain parts of Chapter 82-75 WAC need restructuring to make it more user-friendly and clear.

Those apprehensions resulted in a much more limited database in 2014 in which many insurers were not required to submit information.

The latest legislation makes data collection voluntary only for employer-sponsored self-funded health plans and Taft-Hartley trust health plans.

However, Becker said when they wrote up the follow-up 2015 legislation “we set some pretty strict privacy protections into it.”

The vulnerability of health care data has been a hot-button topic lately.

Last year, a cyber-attack on health insurer Anthem left over 78.8 million people’s records breached.

Around 10 million people were affected when Excellus BlueCross BlueShield too was hacked that same year.

Last month, the Washington State Health Care Authority admitted to a data breach in which the personal identifiers and health data of 91,000 state Medicaid clients was improperly shared between two state government workers in violation of federal law.

The APCD law addresses security and privacy concerns by requiring OFM to set up procedures for ensuring the data is collected and stored in accordance with existing state and federal privacy laws. This includes the Chief Information Officer’s policy mandating adherence to common IT security standards.

The law requires any request for data must first demonstrate how the information would be handled securely and maintain confidentiality. Requesters must either return or destroy the data.

The goal of the APCD project has received a positive reception from the local health care industry, including Washington Health Alliance (WHA) Executive Director Nancy Giunto, who testified at the January committee meeting.

WHA already maintains their own voluntary database and rely on contributions from the 183 member organizations to cover the costs.

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