A new report by the California Health Care Foundation (CHCF) will assist state regulators in establishing a new All Payer Claims Database (APCD) in that state. The new database is one of many being considered by states as part of a nationwide movement to improve price transparency in health care.

California, home to several large insurers and health systems, is one of the largest states in the process of creating an APCD. These systems allow the collection of more complete insurance claim data sets, and many states are creating web sites to share some of that data with the public.

According to the Agency for Healthcare Research and Quality (AHRQ), APCDs have several advantages over former systems of claims reporting:

They include information on private insurance not found in other datasets.
They include data from most or all insurance companies operating in any particular state, unlike some earlier proprietary datasets.
They include information on care for patients across care sites, rather than just hospitalizations and emergency department visits. These older data sets reported primarily discharge data and were maintained by state governments or hospital associations.
AHRQ said the new systems also include large sample sizes, geographic representation, and capture of longitudinal information on a wide range of individual patients.

State data collection vs. trade secrets

The California state legislature passed a bill to establish an APCD in 2018, and the final report on recommendations is due on July 1, 2020. The latest report reviews legal questions around whether prices negotiated by health insurers constitute trade secrets. California's laws in this area are broader than federal law, providing more protection of information in some cases.

Overall, the study said the state should be able to establish an APCD without damaging competition. "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 said.

Drug prices were another focus

According to an analysis by Laura Burns in the State of Reform, the California report looked specifically at drug pricing, and said that such drug price data should be made public.

In analyzing APCD efforts in other states, the CHCF researchers found that common payment data collected on drug claims included: paid amount, capitation/prepaid amount, charge amount, cost sharing (co-pay, coinsurance, deductible), dispensing fee amount and ingredient cost/list price. Some states in the study collect allowed amount as well.

The CHCF study notes that dissemination of the data varies from state to state. "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," the report said. In addition, the report recommended adopting Washington's tiered system of releasing data.

"Tier 1 would comprise data releases to the public, including price reports and other consumer- or policy-relevant findings, on a publicly available website," the report said. "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."

The study also calls for the state to share clear information and policies with all submitters prior to data collection, create a data release committee to oversee the process, and said that the APCD data system should be monitored for anticompetitive behavior.

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Lessons on data sharing from California's all-payer claims database

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