Hospital Impact: States use claims data to experiment with healthcare improvement efforts

U.S. roadmap
States across the country are trying out new legislation, regulations, policies and initiatives in the hope of improving both the cost-effectiveness and quality of healthcare.
Gelburd

In the wake of the recent presidential election, questions have been raised about what will happen to federal healthcare law and policy. As relevant as those questions may be, they shroud the importance of what is already happening at the state level. In essence, there are 50 living laboratories around the country, trying out new legislation, regulations, policies and initiatives in the hope of improving both the cost-effectiveness and quality of healthcare.

To inform their efforts, states benefit from access to privately billed healthcare claims data from an independent, neutral source. Robust, reliable, geographically specific, regularly updated data can support a wide range of state health programs and initiatives.

Workers’ compensation

In administering workers’ compensation (WC) programs, states have an interest in providing fair compensation for healthcare services. With private claims data that are national in scope, geographically granular—reflecting local market practices—and up to date, they can help evaluate reasonable rates and also can support the development of equitable WC fee schedules. Such data help states build new fee schedules, update existing fee schedules and compare their rates to costs in other states. The data also provide a benchmark for dispute resolution in states without a fee schedule or for definitions of “prevailing rates” or “reasonable fees.” States where such data have been used in supporting WC programs include Georgia, Kentucky, Mississippi, North Dakota, Pennsylvania and Wisconsin.

New White Paper

Fuel Top Line Growth Across All Lines of Business

Read the latest white paper on how health plans can empower brokers, sales, and marketing teams to increase acquisition and retention rates to achieve their 2020 revenue goals.

Consumer protection laws

An increasing number of states seek to protect consumers from “surprise” bills for out-of-network or emergency services by holding consumers harmless to their in-network rates. They also are trying to ensure transparency regarding reimbursement levels when a consumer voluntarily goes out of network. Some states have already passed such consumer protection laws and others are debating them. A reliable, independent source of private claims data can help; indeed, it has already done so.

A New York consumer protection law defined “usual and customary cost” as the 80th percentile of an independent database unaffiliated with any insurer. The state’s Department of Financial Services named a specific source as the only data source meeting that definition. As a result, the 80th percentile of that source is now used in the law’s transparency requirements and is one of several factors used in dispute resolution.

Connecticut’s consumer protection law specified that providers of out-of-network emergency services would be reimbursed at the highest of three data points: the plan’s in-network rate, Medicare or the “usual, customary and reasonable” (UCR) rate. The Connecticut Commissioner of Insurance named the 80th percentile of a specific independent source as the reference point for the UCR rate.

Consumer engagement tools

Free consumer websites, preferably available in both English and Spanish and as a mobile app, allow consumers to estimate costs for out-of-network procedures and provide plain-language curricula about health insurance. States use that type of site in connection with their exchanges as an official tool to support transparency efforts. Health plans operating on state exchanges also can private-label such sites. In addition, a number of insurance plans’ websites provide their members direct links to independent tools to evaluate out-of-network costs and benefits. 

Medicaid reform

A number of states have been re-evaluating their Medicaid fee schedules to determine whether provider reimbursement levels limit beneficiary access to services. Private claims data can support that evaluation process. Further, a source of such data can provide managed care organizations with analytic reports and help states advance their reform efforts to transition from fee-for-service to value-based payment methodologies.

All-payer claims databases

According to available statistics, 18 states have enacted all-payer claims database (APCD) legislation, and at least 12 more states are exploring APCD initiatives. States have found that APCDs can be challenging to sustain, and that it can be difficult to extract value from the data collected. A national, independent data resource can help states frame and implement targeted studies; provide other state data as a comparative resource; and achieve cost efficiencies, for example, by allowing states to capitalize on the resource’s existing tools, business intelligence platform, statistical resources and sustainability model.

Analysis and research

An independent, national source of private claims data can provide states with reports revealing intended and unintended consequences of state statutes, regulations or public health initiatives. For example, such data can reveal whether state statutory and regulatory efforts to reduce opioid overdoses, heighten awareness of sports-related childhood concussions or increase utilization of the HPV vaccine are having their intended effect. If the data span a sufficiently long period of time, states can look to “before” and “after” scenarios of when an initiative or state program was launched and can identify trends in population health and treatment.

Legislative planning

Private claims data also can help states frame legislative priorities and identify areas of concern, such as growing childhood obesity. An independent data resource is routinely invited to present its findings on a wide variety of topics to educate lawmakers about health- and insurance-related issues.

Robin Gelburd, JD, is the president of FAIR Health, a national, independent nonprofit with the mission of bringing transparency to healthcare costs and insurance reimbursement. FAIR Health oversees the nation’s largest repository of private healthcare claims data, comprising more than 21 billion billed medical and dental charges that reflect the claims experience of more than 150 million privately insured Americans.

Suggested Articles

Here are three pressing questions that value-based care provider groups want CMS to answer on their new direct contracting payment model.

Federal regulators have listened to physicians' complaints about health IT burdens and they have some solutions.

NRC Health was hit with a ransomware attack Feb. 11 and it still working to restore its systems and services.