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FHC President Testifies at First SAPCDAC Meeting

President, Freedman HealthCare, LLC

John, principal of Freedman HealthCare LLC, has 25 years of experience in performance measurement & improvement, health IT, care delivery, and health care reform. At FHC he has helped many states create all-payer claims databases, implement health insurance exchanges, and support health care transformation.

Today, I had the privilege of testifying before the first meeting of the State All-Payer Claims Database Advisory Committee (SAPCDAC). Those of you on this blog likely know that I’ve worked on APCDs since 2005, and my team and I here at FHC have worked on APCDs in over 20 states—touching the vast majority of all APCD efforts of the past 2 decades. So, I spoke from that perspective.

My written testimony is copied below, but in my oral presentation I urged the Committee to

  1. Create a data standard that looks like the vast majority of state templates. About 90% of the elements overlap each other. Under the new law, most states are likely to adopt the national standard—your proposed national standard—if it is robust and broadly aligns with their existing formats. What do I mean by robust? It means it has to be broad, including useful elements even if not all states ask for them or use them currently. If the standard it too skinny, it will not be in the interest of states to adopt, and there will be a lack of enthusiasm to support it.
  2. Make the standard open-source and in the public domain. The eventual standard will be based upon the public and largely publicly-funded work of pioneering states. The standard must be and stay freely available to all users. Updates should be managed through a public process such as the DOL or a national standards organization, and not a private process or entity.
  3. In addition to creating a robust and public format, this Committee, the DOL, and HHS must recommend that Congress formally adopt the resulting standard in ERISA, so that the impediment of the Gobeille decision* may be removed, giving states further incentive to adopt it.
  4. Examine other obvious and upcoming data issues for APCDs. For example, alternative payment models (APMs) are a growing share of health care payments. Three state APCDs already collect data on APMs, using 2 different approaches. Before we go further, a standard for APM data would help us avoid repeating where we are with fee-for service (FFS) data standards. The DOL should use the Committee as needed to address evolving data needs of our health care system, such as expanding and standardizing race and ethnicity data, or combining claims and clinical data.
  5. Relevant federal actors should clarify that federal health benefits, such a FEHB and TriCare, should participate fully in state APCDs. Federal employees are a sizable portion of the workforce in many states, and if they are excluded, they may also be excluded from having a full voice in the reform efforts of their home states.

*The legal issues are complex. According to Justice Breyer, DOL could issue new rules under ERISA that could mandate submissions which cold be turned over to states. And, the Rutledge decision, which found that states could levy heavy penalties for non-participation in a state data project and not violate ERISA exemption, opens another possible door to access. Georgia’s draft law includes such language. The cleanest way to overcome Gobeille, in my opinion, is to amend ERISA. IF that doesn’t happen, I expect to see DOL or states to pursue the other avenues.

Written Testimony for the May 19, 2021 Meeting of the State All Payer Claims Databases Advisory Committee
Submitted by John D. Freedman, MD, MBA, president and CEO of Freedman Healthcare

Thank you, chairperson Mustard and members of the State All Payer Claims Data Advisory Committee (SAPCDAC) for this opportunity to address you today regarding the critically important work of your committee.

For more than a decade, state All-Payer Claims Databases (APCDs) have offered policymakers, public health officials, researchers, and other stakeholders ready access to comprehensive, longitudinal data on healthcare services use and their cost. But their full use has been limited by a variety of circumstances.

The work of this Committee will have a significant impact on improving the data and the benefits of APCDs and will help states realize the full potential of these data sources to support price transparency; track waste and unnecessary procedures in healthcare; track issues related to COVID-19, the opioid epidemic, and other public health concerns; evaluate the quality of doctors and hospitals; measure the market power of high-priced providers; and so much more.

One obstacle to wider use of APCDs is that each state has its own way to collect data, so it is harder and more costly for an insurer that works in many states to produce the data, and it is hard for metro areas that cross state lines to benefit from existing, non-standard, single-state data.

Perhaps the biggest obstacle to APCD data use is the Supreme Court ruling in Gobeille v Liberty Mutual that found that states can’t force certain private plans to participate in their APCD.

The SAPCDAC can clear a path to fix this restriction and allow states to maximize the value and power of their APCDs to inform health policy, educate stakeholders, undergird research and healthcare reporting, and enable to regional and national benchmarking.
To be successful in improving the collection and use of state APCD data, I respectfully urge the Committee to do the following:

  1. Create a standard that looks like the vast majority of state templates. The state data formats currently in use overlap each other enormously, yet each has unique features, because states haven’t had a strong reason to conform. Under the new law, they do, and most are likely to adopt the national standard—your proposed national standard—if it is robust and broadly aligns with their existing formats.
  2. Make the standard open-source and in the public domain. The standard should be based upon the public and publicly-funded work of pioneering states, under the auspices of this committee and the DOL. It must be and stay freely available to all users.
  3. In addition to creating a robust format, make a clear recommendation that Congress formally adopt the resulting standard in ERISA, so that the impediment of the Gobeille decision may be removed, giving states further incentive to adopt it.
  4. Examine other obvious and upcoming data issues for APCDs. For example, alternative payment models (APMs) now account for a significant and growing portion of health care payments. Three state APCDs already collect data on APMs. Before we go much further, a federal standard for APM data collection can help us avoid repeating our situation with varied fee-for service (FFS) data standards. The DOL should use the Committee as needed to address evolving data needs of our health care system.

With the upcoming October 2021 grant funding from the federal government totaling $2.5 million per state to help them launch or expand their APCDs, the opportunity is now to address the obstacles to full use and implementation of APCDs.

We applaud the Committee and its commitment to improving APCDs and making their use more efficient and more widespread.

Dr. John Freedman, MD, MBA, is principal of Freedman HealthCare LLC, which since 2005 has helped states aggregate and apply healthcare data to support cost containment, quality improvement and improved health outcomes. Freedman HealthCare is the leading resource for All-Payer Claims Databases (APCDs), supporting planning, implementation, and management of multi-payer claims databases in more than 20 states nationwide.

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Interested in learning more about the benefits of expanding the reach of state APCDs? Check out Dr. Freedman’s Op-Ed in Stat News.

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