The California Health Care Foundation releases report on state plan to develop all payer claims database

The California Health Care Foundation (CHCF) released a new report this month on disclosure of health care pricing titled, The Secret of Health Care Prices: Why Transparency Is in the Public Interest. The authors of the article are executive staff and researchers from The Source on Healthcare Price and Competition, a project within the University Of California Hastings College of Law.

The report reviews All Payer Claims Databases (APCDs) already implemented in other states, to inform California’s implementation of their own statewide health care payments database.  APDCs collect and release information on the cost of health care within the state.

This report recommends price transparency that details median prices by payer, provider, service, and zip code, as well as patient out-of-pocket expenses specific to the patient, plan, procedure and provider.

 

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California’s Office of Statewide Health Planning and Development (OSHPD) began planning for the state’s APCD in January 2019, and is currently conducting committee meetings and developing recommendations for design and implementation. The California database, the Health Care Cost Transparency Database, will collect information about amounts paid for health care services, which includes the negotiated rates between providers and insurers.

The Committee is scheduled to submit  a report on their findings to the California legislature on July 1, 2020. As required by statute, the Committee consists of members from various expert groups and stakeholders within the state, including insurers, health plans, providers, consumer groups, businesses, consumer organizations and organized labor.

The report reviews the federal and California state laws regarding the definition and protections for trade secrets. California law, protects a broader range of information than the federal law, by including information that may be readily accessible by other proper means. Several court cases (ex. Children’s Hospital v. Blue Cross of California) have examined the issue of whether negotiated prices are considered trade secrets. In this report, researchers found:

“APCD reports would be unlikely to cause anticompetitive harms that outweigh procompetitive benefits unless ‘competitor recipients of the reports used the information to enter into price fixing agreements.’”

The report examines data collected and disseminated in other state APCDs, and compares the regulatory requirements across 18 states with mandatory APDCs. The report contends that releasing drug pricing information to consumers is in the best interest of the public. Findings include a number of similarities in data elements across the evaluated states. Common data collected are paid amount, capitation/prepaid amount, charge amount, cost sharing (co-pay, coinsurance, deductible), dispensing fee amount and ingredient cost/list price. Some states collect allowed amount as well.

Dissemination practices differ, and are regulated by each state with various guidelines around who can access the information, which data elements are disseminated, and how data can be used. For example, in Washington State, data requestors have to assert a public benefit justification in their request. All APDCs also incorporate Data Use Agreements to protect the sensitivity of the information and limit its use. Researchers recommend following a model similar to Washington, where the scheme for releasing data is based on the type of requestor (researchers, government agencies, other agencies and the public.)

“California should also consider adopting a tiered data release policy that improves upon Washington’s tiering scheme. Tier 1 would comprise data releases to the public, including price reports and other consumer- or policy-relevant findings, on a publicly available website. Tier 2 would include data releases to government or academic researchers. While these data releases should be reviewed, they should be presumed to be procompetitive. Tier 3 would include data releases to private entities or industry participants,” reads the report.

The report included several other specific recommendations for OSHPD and the Committee.  It recommends that OSHPD provide all data submitters with clear information and policies regarding data release prior to data collection. It also advises OSHPD to create a data release committee with established release guidelines and a mechanism for weighing competitive effect and public interest. The report authors recommend additional oversight and protection in the form of a data use agreement and monitoring claims for anticompetitive behavior.