Creation of an All-Payer, All-Provider Claims Database (APPCD)

Massachusetts Division of Health Care Finance and Policy
Boston, MA

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Health care claims can serve as a valuable source of data to better understand the quality, cost, and efficiency of the health care delivery system in Massachusetts. Unfortunately, the ability to analyze health care claims data in Massachusetts is limited now for a variety of reasons. The data is currently collected by several state government entities in various formats and levels of completeness. As such, there is no central repository for data (i.e. one location where data from all payers and carriers are stored) and there is a lack of continuity within the data (i.e. a patient cannot be followed from one insurance carrier to another easily). In addition, there is inconsistency in the collection, standards, codes, and methodology currently used across states and state agencies. This results in: 1) lack of interstate/ national comparability of data, 2) high costs for carriers and data submitters since they have to provide the same data in multiple formats, and 3) high costs for data recipients and processors. All of these issues create unnecessary obstacles for those who wish to analyze the data.

These challenges demonstrate the critical need to develop and implement a database which captures patients’ care across providers and payers, and is collected and stored by a single entity. Such an innovative and comprehensive database would:

• Inform more thoughtful health policy and program decisions based on robust data analyses, and assist the Commonwealth in its efforts to mitigate health care costs and improve quality;
• Eliminate duplicative data requests to health payers by state government entities;
• Generate cost savings for both carriers and government agencies by maintaining data centrally in one location (thereby ensuring administrative simplification); and
• Promote greater transparency in the health care delivery system.

In response to these challenges, the Massachusetts Division of Health Care Finance and Policy (Division) proposes to build an all-payer, all-provider claims database (APPCD) under its authority recently granted by Massachusetts General Law (Chapter 305 of the Acts of 2008 – An Act to Promote Cost Containment, Transparency and Efficiency in the Delivery of Quality Health Care). The Division has proposed regulations to collect and make available data on all private health care claims (including self-insured – who represents half of the privately insured – as well as fully insured claims). The Division is also working with the Office of Medicaid and the Commonwealth Health Insurance Connector Authority to incorporate MassHealth and Commonwealth Care data, respectively, and is submitting an application to the Centers for Medicare/Medicaid Services to obtain Medicare data as well. The result will be one of the only all payer, all provider claims databases in the country, and will benefit health care consumers, providers, researchers, and policy-makers throughout the Commonwealth.

It will be a key resource to the Division in carrying out its mission to improve health care quality and contain health care costs. While Massachusetts has successfully tackled the issue of ensuring access to health insurance coverage, with over 97 percent of Massachusetts residents now insured, the issue of rapidly rising health care costs continues to cause significant challenges. Access to timely, accurate and relevant data is essential to mitigating costs, improving quality, and promoting transparency and efficiency in the health care delivery system. The Division could provide data to sister agencies which will relieve the payers of multiple requests for information, reduce related administrative costs, and provide a common dataset on which to base policy and regulation across Massachusetts. The APPCD will provide a broader and more robust dataset for the calculation of those measures while eliminating the need for the Health Care Quality and Cost Council to collect data separately. The APPCD will be a rich resource for health care organizations that can use the data to further their own research efforts.

This approach will also use the experience and knowledge of other states – particularly Maine, New Hampshire, and Vermont – who have built multi-payer and all-payer claims datasets. Some early results reported from these types of efforts include:

• The New Hampshire Purchasers Group on Health developed benchmark reports based on 2005-2007 claims data to understand the prevalence of health conditions, use of preventative services, and payments by services types for its members.
• The Oregon Health Fund Board reported in 2008 that evidence based guidelines developed from data from the local APCD could save an estimated $650 million in the first three years and $4.2 billion in the first 10 years of implementation.

The incremental costs of this project to state government are cost-effective given the potential benefits of this solution. The planning and regulation development phase (FY2010) is estimated to cost $171,000. The full development of the APPCD in FY2011 is estimated at $1.14 million. The costs estimated for FY2012 include both the final development stages as well as the beginning of the maintenance phase. The costs for this portion of the project are estimated to be $938,000. Once the Division reaches the maintenance phase for the APPCD in FY 2013, it will cost $678,000 in incremental costs to the Division annually. The project is currently launched and the funds for FY2011 are secured.

The APPCD will expand upon two limited data sets currently collected and managed by the Division. The Division has collected discharge data from all Massachusetts hospitals for two decades and maintained an all-payer hospital discharge database. The Division expanded its responsibility in 2009 to include collecting claims data (from commercial, fully insured plans) on behalf of the Health Care Quality and Cost Council. In this role, the Division is responsible for data management (collection, cleaning, standardizing, and following up with providers), data analysis, and reporting of a comprehensive, integrated data set for over 3 million Massachusetts residents.

Unlike these databases, the APPCD will include fully–insured and self-insured plans as well as public payers (Medicare and Medicaid). But similar to these databases, the development of the APPCD will leverage the Division’s experience, strong information technology, and business infrastructure. Ultimately, the APPCD is a critical and necessary tool to improve health care quality, clinical outcomes, advance public health, and mitigate health care costs in Massachusetts by promoting public transparency and objective analysis of the health care delivery system.

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