Last week federal regulators took a small step forward to implement new rules for health plan transparency as required under the Affordable Care Act (ACA). This week, researchers at Georgetown University’s Center on Health Insurance Reforms (CHIR) released a white paper outlining a new and powerful transparency framework that regulators and policymakers can use to better understand how insurers are complying with the ACA’s market reforms and how consumers are using their coverage and accessing health care services.
Harnessing “big data” to implement ACA transparency requirements
Health insurance companies were early adopters of big data to help them understand the health risks posed by their current and potential enrollees. Retailers use it to study consumer shopping patterns. Scientists use it to understand environmental trends. Hospitals and other health systems use it to improve patient care. Police departments are using it to prevent crime. Just about the only people not using big data these days are those responsible for health plan oversight and consumer protection. But that could change, thanks to sweeping data reporting and transparency provisions in the ACA. The ACA requires insurers, both inside and outside the health insurance marketplaces, and employer-sponsored health plans to report the following data to state and federal officials and the public:
- Claims payment policies and practices;
- Periodic financial disclosures;
- Data on enrollment;
- Data on disenrollment;
- Data on the number of claims that are denied;
- Data on rating practices;
- Information on cost-sharing and payments with respect to any out-of-network coverage;
- Information on enrollee rights; and
- Other information as determined appropriate by the U.S. Department of Health & Human Services (HHS).
The statute thus contemplates a comprehensive data collection scheme that can give state and federal regulators a powerful new ability to answer important questions about health insurers’ behavior and consumers’ experiences with their coverage. To effectively implement this provision, officials need a data collection framework that captures a maximum amount of information in the most efficient and cost-effective way possible. This requires relying not just on traditional regulatory tools such as summary reports, but also taking advantage of the revolution in so-called big data.
What is “big data”? The term refers to exceptionally large data sets that can be mined with a computer and sophisticated algorithms. Big data can help regulators and policymakers better understand what’s happening with private health insurance on a granular level. For example, it can help them get a picture of which plans have the most people seeking out-of-network care. It can help ascertain whether there are patterns of denied claims for certain types of patients, such as those needing behavioral health services, oncology care, or specialty drugs. Big data can help officials zero in on an insurer’s potentially problematic behavior, such as one who appears to be enrolling people only from zip codes known to have young, healthy residents.
Better – and more efficient – oversight with big data
The white paper argues that big data offers regulators and consumers not just better oversight and consumer protection, but also improved data integrity, greater efficiency, and – counterintuitively – a lower reporting burden on insurers than might otherwise be the case. At the same time, the authors acknowledge that the required data collection activities will require a shift in a regulatory culture that has historically relied on summary-level reports and avoided real-time monitoring. It will also place new resource burdens on already strapped state and federal regulatory agencies, particularly as they work with insurers to clarify the breadth and scope of the data collection and establish the necessary information technology infrastructure. They will also need to proactively address privacy and security concerns.
But like it or not, the ACA requires the development of a new data collection infrastructure. With this comes the ability to gain a picture of consumers’ experiences with coverage that has never before been fully available. To paraphrase one of the health industry experts consulted for the paper, however, if we have to build a new infrastructure to do this, let’s make sure it’s a 21st century one, not a 19th century one.
To read the full report, click here.