A report from Manatt Health outlines the value and potential of state all-payer claims databases (APCDs) as well as their current limitations. The report also makes an argument for a national APCD operating model that envisions federal support and regulatory action to resolve state APCD data completeness issues.
During a Dec. 7 webinar, Kevin McAvey, a director at Manatt Health and author of the report, said APCDs are key to understanding what is going on in our health system.
“For all their complexities, APCDs are like CT scan machines for our health system. They are powerful tools that allow us to look beyond the symptoms of our healthcare concerns to show how our health system is functioning, how its operating,” he said. “APCDs are databases that comprise records of healthcare interactions, receipts of services rendered across payers and providers across populations and service types. Their value is in allowing us to look at how our numerous and intertwined delivery systems are operating together to support the health and well-being of all Americans to better inform and target healthcare policy-making program reforms and purchasing decisions.”
McAvey started with three key points. One, we need more health system transparency in America, and we do not have the national infrastructure or the tools in place right now to support it. “Two, APCDs are one of those tools. They are proven data resources that are being implemented across the country from Texas to Indiana, from Georgia to California, to support health system transparency, but they are proliferating without a national data strategy or coordinated blueprint,” he explained. “They are working independently from one another, which has resulted in several resolvable but structural barriers that limit their use and utility. Three, federal and state leaders have the opportunity to recast this model by investing locally in our state health data organizations to build national health data capacity.”
According to the report, throughout 2022, more than 40 federal and state policymakers, regulators, researchers, and other health data leaders were engaged to confirm the legal, regulatory, technical, and operational root causes of APCD limitations and to design and test potential alternative APCD operating models that could resolve them—to the benefit of current and future state APCD users. Ideas for solutions was guided by nine principles that were identified by stakeholders as essential to the success of any model. One of those principles is that national health system transparency is needed. A national APCD is required to provide insight into national and regional health system, population health, and public health issues, the stakeholders agreed.
Another principle is that strong state health data use requires reliable and sustained funding. States are responsible for overseeing increasingly complex and interconnected health care markets but do not have commensurate resources to build and sustain the data and analytic capacity necessary to meet the needs of modern, data-driven regulatory agencies.
The stakeholders recommended the pursuit of a model that would strengthen and build from the existing state-based APCD structure to create new national health data capacity: the “Federally Facilitated State Data Partnership” model.
In this model, the report explains, “states would continue to serve as APCD data owners and have the option of participating in a national health data compact. As part of the compact, states would continue to collect payer data locally but in alignment with new national data standards and practices. States would then share collected data with a new national health data organization (HDO). In exchange for their participation, states would receive federal financial support and be granted new access to federally regulated and administered health data, such as data for the ERISA-preempted self-insured. For states without an APCD or that choose not to participate, the National HDO would collect APCD data directly from payers operating in those states to complete a national picture. The National HDO would provide national policymakers, regulators, and researchers—as well as states—with a new, centralized resource for cross-state health system administrative data.
The stakeholders envision that the National HDO would be contracted and funded by, but sit outside, the federal government and be governed by a combination of federal, state, and consumer privacy representatives in a public and transparent manner. “The National HDO governing body would be responsible for overseeing the organization and its operations as well as approving national APCD data standards, baseline privacy and security standards, and the purposes for which the national APCD may be accessed and used.”
McAvey described a series of action items required. The first is a creation of a National Health Data Organization by the federal government. This data organization’s responsibilities and functions would include developing and managing a national APCD data standard, collecting and curating the data that they receive from state APCDs in order to support national data analytics and reporting. It would support data privacy and security management both for itself as well as setting baseline standards across the country.
Another action item would be one-time funding to help implement standards. It would provide one-time capacity-building grants for states to participate in the federally facilitated APCD model.