Healthcare Law Blog

Part I: Understanding All-Payer Claims Databases

Over the last decade, many states have established all-payer claims database (“APCD”) systems that collect medical, pharmaceutical, and dental eligibility and claims information. Payers, including insurance providers, third-party administrators, prescription drug plans, Medicaid, and Medicare, are responsible for depositing eligibility and claims data into a collective system. The data can then be used to generate important information about cost and quality of care. By gathering detailed information in one place, a statewide picture emerges – information on service providers, patient demographics, and other important healthcare data.

In the majority of states that have implemented APCDs, data submission is mandatory, and statutory penalties (some very costly) are enforced for delayed entries. Some states make APCD data available to the public for free in a consumer-ready form. Some states sell the data to businesses that are eager to digest it for their own uses, and still other states only allow restricted access to the system.

In places where access is not restricted, consumers can make informed decisions about their health care spending and even elect where to receive their services at a lower cost. Businesses can evaluate coverage costs and services that are provided to employees and use such information to provide more cost-efficient insurance to their workforce.

Policymakers are generally key stakeholders in the creation of APCDs. Most of these systems are run by the government, though it is possible to have a non-governmental, external agency in control (as Colorado does). Typically, APCDs are the by-product of legislation. It is important for any legislative efforts to outline several essential components:

• Who will be in charge of the management and oversight of the system?

• What are the technical and logistical needs of the system?

• What formats and policies will be used? What penalties will govern?

• What will be the funding source?

Once an APCD is established, policymakers reap the rewards. The data is invaluable for legislators and officials; they can evaluate specific health care in their area, decide what programs need to be implemented and/or eliminated, and what cost-savings measures can be instituted at the governmental and private level.

With consumers and policymakers both benefiting from the creation of state APCDs, it looks like the systems are a win-win. Check back on Thursday, and we’ll discuss the pros and cons of APCDs for providers.

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This article does not constitute legal advice.