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All-payer claims databases

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All-payer claims databases (APCDs) are statewide databases that collect healthcare claims data from insurance companies, government agencies, and other entities that pay for healthcare on behalf of individuals. The databases are often, but not always, created by state mandate and require all payers to submit data. Their primary purpose is to provide policymakers with data on the use and costs of healthcare in a state to enable more effective policy decisions.

Data collected in APCDs are generally de-identified and encrypted. Access to the data is controlled by the overseeing agency and typically involves filling out an application and paying a fee. The annual cost for maintaining an APCD ranges from $350,000 to $2 million.

On March 1, 2016, the United States Supreme Court issued an opinion in Gobeille v. Liberty Mutual Insurance Company that states cannot require self-funded employee health plans to report data to APCDs. About 93 million Americans are included in such plans. The ruling is likely to affect databases in several other states. As of March 2016, 12 states had an operational APCD, and another five were in the midst of developing one.

Background

All-payer claims databases (APCDs) are statewide databases that collect healthcare claims data from insurance companies, government agencies, and other entities that pay for healthcare on behalf of individuals. The primary purpose of all-payer claims databases (APCDs) is to provide policymakers with information and data on the use and costs of healthcare in a state. APCDs arose in the early 2000s, when healthcare spending growth was rising after a period of slower growth and states were looking for ways to reduce costs. Interest in establishing APCDs broadened after the Affordable Care Act instituted many new reforms to the way healthcare is paid for and delivered to patients. The idea is that with the data collected in the database, policymakers can make more effective policy decisions, implement targeted reforms, and better manage public programs and healthcare systems in general.^[1]^[2]

Most APCDs are created by state mandate and require payers to submit data or face penalties. APCDs can also be created in the private sector voluntarily; these APCDs do not have any legal authority but may enter into contracts or agreements with payers to collect data. Payers include insurers, third-party administrators, pharmacy and dental benefit administrators, Medicaid, Medicare, the Federal Employees Health Benefit Program (FEHBP) and TRICARE (the military's health plan). While most existing APCDs collect data from insurers, third-party administrators and Medicaid, "no state has incorporated TRICARE and FEHBP data into its APCD yet."^[3]

In addition to informing policymakers, APCDs can be used for multiple purposes. Some states have used their APCD data to establish websites for consumers to compare prices and quality among providers. In other states, insurance departments have used the data to inform insurer premium rate review decisions. Providers can use the data to compare the rates they charge with those of other providers and adjust accordingly. Insurers and employers can also use it to evaluate whether they are getting the best deals on price.^[1]^[4]

The first all-payer claims database was established in Maine in 2003. As of March 2016, 12 states had operational state-mandated APCDs, five had passed legislation authorizing them and were in the development stage, and 21 states had expressed a "strong interest" in creating one. Voluntary APCDs existed in four states, and one state, Virginia, had a state-run APCD that accepted voluntary submissions.^[1]^[5]

Information collected

According to the APCD Council, a coalition of public and private entities, information typically collected by all-payer claims databases (APCDs) includes the following:^[6]

“

Social Security Number
Patient demographics (date of birth, gender, residence, relationship to subscriber)
Type of product (HMO, POS, Indemnity, etc.)
Type of contract (single person, family, etc.)
Diagnosis codes (including E-codes)
Procedure codes (ICD, CPT, HCPC, CDT)
NDC code / generic indicator / other Rx
Revenue codes
Service dates
Service provider (name, tax id, payer id, specialty code, city, state, zip code)
Prescribing physician
Plan charges & payments
Member liabilities (co-pay, coinsurance, deductible)
Date paid
Type of bill
Facility type

^[7]

”

Information that is not collected includes the following:^[6]

“

Services provided to uninsured
Denied claims
Workers' compensation claims
Referrals
Test results from lab work, imaging, etc.
Provider affiliations
Premium information
Capitation fees
Administrative fees
Back end settlement amounts
Back end P4P or PCMH payments^[8]

^[7]

”

Data collected in APCDs are generally de-identified and encrypted "to mask the identity of the individuals in the database."^[3]

Access to data

Non-governmental access to the data stored within all-payer claims databases (APCDs) varies by state and policies regarding the release of data are typically set by the state agency that manages the database. The managing agency also varies by state; in most states with APCDs, the state health department or insurance department oversees the database, but in Colorado, the legislature created a stand-alone nonprofit organization for the purpose.^[2]^[3]^[9]

According to the Commonwealth Fund, "Minnesota has the most restrictive data release policies, limiting data access to state government only." Most of the other states with APCDs divide the data into public use data sets and limited use data sets. Public use data sets "contain no direct or indirect identifiers" of the involved parties, such as individuals and healthcare providers. Limited data sets contain identifiers that have been hashed, which means they have been replaced with a random string of characters. Although the hash is irreversible, an individual, provider or other involved party will be marked with the same hash throughout the data set, making it conceivably possible to narrow down their identity, although regulations prohibit re-identifying data.^[2]^[10]

Accessing both types of data sets typically requires filling out a request form and paying a fee. Fees can range from hundreds to thousands of dollars. Forms for requesting limited use data sets are lengthier and substantially more complicated and in-depth, and the fees are more expensive.^[2]^[10]^[11]

Cost

According to a 2011 report from the APCD Council, states with all-payer claims databases (APCDs) have reported annual costs for maintaining the database to be between $350,000 and $2 million. It's unclear whether more recent cost estimates are available.^[12]

States use a variety of methods to fund the operation of their APCDs. Beyond providing annual appropriations in the budget, states have also assessed fees on insurers and providers and used federal Medicaid matching funds for the purpose. Some states rely on the sale of data sets to fund the APCD. One state, Colorado, set up a nonprofit to run the APCD and placed responsibility on the organization to raise funding through grants and other methods.^[12]

Support

Arguments in support of all-payer claims databases (APCDs) include the following:^[2]^[4]^[13]

APCDs fill information gaps for healthcare policymakers, allowing them to make more effective policy decisions.
APCDs "inform cost containment and quality improvement efforts" for both policymakers and providers, ultimately lowering the cost of healthcare.
APCDs provide price transparency for employers and consumers, allowing them to choose the most cost-effective care and ultimately lowering the cost of healthcare.
Price transparency through APCDs could prompt providers to lower their prices to match other lower-cost providers.
APCD data will "generate valuable research respecting trends in cost, quality, and utilization."

Criticism

Arguments critical of all-payer claims databases (APCDs) include the following:^[14]

Only larger entities such as insurers and academic institutions have the resources to access APCD data.
Due to cost and regulatory barriers, individuals typically cannot access the data within APCDs to make healthcare decisions.
If individuals were to access APCD data, they would have difficulty understanding it without specialized technical knowledge.
APCDs have not been consistently shown to lower costs.
APCDs add "another level of intermediation in a marketplace that's already heavy with intermediaries."
The data contained within APCDs are too out-of-date to provide real usefulness.

Lawsuit

In Gobeille v. Liberty Mutual Insurance Company, Liberty Mutual challenged Vermont's all-payer claims database (APCD) law. Liberty Mutual is a nationwide company with offices in all 50 states; it maintains a self-funded health insurance plan for its employees, meaning it assumes the risk for the plan and pays medical claims with its own funds. Liberty Mutual contracts with a third-party administrator (TPA) in Massachusetts to process the claims.^[15]^[16]

The Liberty Mutual world headquarters, located in Boston, Massachusetts

In August 2011, Vermont subpoenaed the third-party administrator to submit data to its APCD. Liberty Mutual directed the third-party administrator not to disclose the data and filed a lawsuit against the state. The lawsuit argued that the Employee Retirement Income Security Act of 1974 (ERISA) takes precedence over, or preempts, Vermont's law. ERISA is a federal law that requires self-funded employee health benefit plans to report financial data to the United States Department of Labor so the department can monitor the financial solvency of the plans.^[15]^[16]

Liberty Mutual argued that because it operates nationwide, reporting requirements for both ERISA and state APCDs, which involve "a patchwork of ... state regulations," imposed a burden upon it, something ERISA was designed to avoid. Vermont argued that reporting claims data did not impose a burden on Liberty Mutual or its third-party administrator because insurers already collect such data.^[15]^[16]

While the U.S. District Court for the District of Vermont found in favor of Vermont, the Second Circuit Court of Appeals reversed and found in favor of Liberty Mutual, ruling that Vermont's law "interfered with ERISA plan administration." Vermont appealed to the United States Supreme Court, which agreed to hear the case. On March 1, 2016, the Supreme Court issued its opinion that ERISA takes precedence over Vermont's law. The Supreme Court held that under ERISA, self-funded employee health plans are exempt from Vermont's reporting requirements. The court agreed with the Second Circuit that because "reporting, disclosure and record-keeping are central to, and an essential part" of ERISA, the federal law takes precedence over state reporting requirements.^[15]^[16]

The ruling will likely impact APCD laws in 17 other states. According to the American Benefits Council, 93 million Americans nationwide are covered by self-funded health plans. Data on their health claims may no longer be required for submission into state APCDs. An analysis of the opinion by Ronald Mann on SCOTUSblog stated that the opinion could have the effect of broadening "ERISA's vague preemption rule" and creating a path for self-funded plans to challenge future APCD reporting regulations issued by states or even by the Department of Labor.^[17]^[18]

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