How expanded data access will affect health plans

Section 105 of the Medicare Access and CHIP Reauthorization Act (MACRA), also known as HR 2, will expand the availability of Medicare data, possibly doubling the amount of healthcare data available to the public. Here's more on what the data expansion could mean for the industry.

1. Broadened non-governmental access to claims data

Joel White, president, The Council for Affordable Health, Washington, D.C., and a former staff director of the House Ways and Means Health Subcommittee, explains that Section 105 revises the Qualified Entity (QE) program by broadening non-governmental access to claims data collected under the Medicare program. Current law, enacted in 2010, gives QEs access only to Medicare claims data (Parts A, B, and D) and requires that all analyses be published.

The reforms in HR 2 would permit QEs to sell analyses and, in some cases, data for a range of non-public uses. "Importantly, this framework converts the QE business model from that of a nonprofit think tank, dependent on contributions, to a profit-making consultancy," White notes.

Depending on whether The U.S. Department of Health and Human Services (HHS) decides to release Medicaid and Children's Health Insurance Program (CHIP) data, the bill could double the trove of claims data accessible to QEs (Medicare and Medicaid/CHIP each account for about 20% of personal health spending).

2. Implications of data analyses

Permitting QEs to sell analyses and combined data for non-public uses fundamentally alters the QE business model and the use of data for population health management. Currently QEs are nonprofit research organizations, funded by contributions. Under the new legislation, they would be for-profit consultancies. "QEs would enjoy a privileged franchise in the analysis of public data on behalf of providers and private health plans, sectors whose gross revenues are expected to total nearly $40 trillion over the next decade alone," White says.

Various studies, including Dartmouth's regional comparisons of Medicare claims data, indicate that 20% to 50% of health spending goes toward wasteful and unsafe medical practices. "To the extent insights derived from public data can help to curb such practices, profit-driven QEs could represent a significant business opportunity and a new source of data to help researchers identify which treatments work best."

White agrees. "The public interest in data transparency has grown apace with our exploding technical capability to glean operational insights from multiple, very large data sets," he says. "In medicine, such analyses can be used to identify best practices with respect to clinical procedures and health system organization, as well as to create accountability and competition at the individual provider level."

Next:How data expansion will affect outcomes, health plans

3. Delivering the best outcomes

Sellers and buyers of medical goods and services both stand to gain from such insights under MACRA's framework. For example, providers can receive as much as a 9% performance bonus based on improvements against a benchmark. Under the law, QEs will assist providers in understanding individual performance gaps, thereby providing insights into improvement strategies and, ultimately, higher payments.

The law forbids QEs from sharing data that includes patient identities, except in cases where the individuals identified are patients treated by the provider purchasing the data. In that case, the provider would be able to see claims data pertaining to their patients' treatments by other providers. The analyses and data, however, may not be used for marketing purposes.

"Giving providers the ability to track patients through the care continuum, across multiple providers, should improve their ability to coordinate care under fee-for-service and will likely earn them higher bonus payments in alternative payment models or in Medicare's new Merit-Based Incentive Payment System (MIPS)," White says.

4. Implications for payers

MACRA permits QEs to use combined data, i.e., combining Medicare data with private claims data, to conduct non-public analyses and sell or provide the analyses to an authorized user for the purposes of assisting providers and suppliers to develop and participate in quality and patient care activities. Beginning July 1, 2015, U.S. Department of Health and Human Services Secretary Sylvia Burwell may expand the available data to include Medicaid/CHIP claims.

However, employers may only purchase QE analyses for the purposes of providing health insurance to an employer's employees and retirees. Insurers may purchase analyses only from those QEs to which they have contributed private data.

Non-public analyses, for the first time, could be used by employers and insurers for activities such as network formation and quality rankings, but the application is narrow and does not permit use of actual data or use of data except for providing insurance. "This is incredibly important as payers seek to better define and leverage high-value networks to deliver lower cost options on individual and small group markets," White says. "To the extent that the QE program is effective in delivering value in network and benefit design, costs will be lower. Likewise, we would expect the quality of services delivered to improve over time as providers seek to market their effectiveness for inclusion in more exclusive network arrangements."

The implications and downstream impact could result in tens if not hundreds of billions in savings to consumers. "These savings will be at risk if there is a political or policy backlash against narrow networks, so payers will need to do an excellent job explaining and demonstrating the value of narrow networks to consumers, employers, and politicians in order to avoid a second round of managed care backlash like we saw in the 1990s," says White.