All-Payer Claims Database: Will the Legislature Revise the Current Law?

March 18, 2015

Last session the state enacted a law, HB 2572, creating an all-payer claims database. With last-minute political maneuvering, the law as passed was flawed. The law has no mandate on private insurers to submit claims to the database –the only mandate is for health plans that contract with the state. There is also a requirement that prevents reports where any one plan represents more than 25 percent of the data. These two limitations make the law largely dysfunctional in its current form.

This session there has been broad agreement on the need to revisit the legislation. WSHA has been an active participant in the discussions since we are very interested in getting access to claims data to help our hospitals with work on quality, safety and planning how to best serve their area residents. Two different bills have been introduced in the Legislature. The versions are different but there is still time to reconcile differences. Both bills mandate that all health carriers submit data into a central database and eliminate the 25 percent requirement on release of data reports.

A bill introduced in the House, HB 1437, sponsored by Representative Cody at the request of Governor Inslee, separates data into categories and provides additional protection for information on how much a carrier pays for a specific claim (protected as “proprietary financial information”). A lead organization, contracted with the state to oversee the database and issue reports, is allowed to have access to claims that contain direct and indirect identifiers along with the amounts paid on a claim for services. Other organizations such as governmental entities and researchers are also granted access to this information. Organizations such as WSHA, if they have a justifiable request and a data sharing agreement, may access claims data with indirect patient identifiers but not direct identifiers or payment information. Data that do not have direct or indirect patient identifiers or payment information may be released upon request.

A bill introduced in the Senate, SB 5084, sponsored by Senator Becker, uses a similar structure but goes further to protect patient privacy. This bill has the state contract with both a lead organization and a data vendor and then limits what data are accessible by the lead organization. Another difference in the House and Senate bills relates to how the state chooses the lead organization for this database. The House bill favors a lead organization that has broad representation from local entities. The Senate bill favors a lead organization that can demonstrate experience in operating a similar data system in two other states.  (Claudia Sanders,

HCA Announces New Accountable Care Program for State Employees

As part of the state’s movement toward value-based purchasing, the Health Care Authority (HCA) recently announced three successful applicants that will enter into negotiations with the state as part of the new Accountable Care Program for public employees. The Accountable Care Program (ACP) was developed at the direction of the state legislature as part of the state health reform efforts enacted in 2014.

The networks selected to negotiate for the ACP are:

  • UW Medicine Accountable Care Network;
  • Providence-Swedish Health Alliance; and
  • Puget Sound High Value Network (lead by Virginia Mason Medical Center).

In April 2015, the HCA will announce which of these networks will manage the ACP over the next five years. The ACP will be a new Public Employees Benefits Board option offered to state employees and their families starting on January 1, 2016. The ACP will pay providers deferentially based on evidence, performance, value and quality, and that emphasize primary care and coordination of care. The HCA aims to drive 80 percent of state-financed health care and 50 percent of the commercial market to value-based payment by 2019. (Chelene Whiteaker,

Medicaid Quality Incentive Award Excellence Once Again

Alert! The week of March 23, Chief Financial Officers will be receiving their hospital’s data for the Medicaid Quality Incentive and an attestation form. The validation form attesting to the accuracy of the quality data needs to be returned to the Health Care Authority with the CFO’s signature.

The Medicaid Quality Incentive gives hospitals the opportunity for a 1 percent increase in inpatient hospital Medicaid payment rates based on meeting best practice standards and is awarded by the Health Care Authority. All prospective payment system hospitals have the opportunity to earn the additional rate based on excellence, and Critical Access Hospitals have the opportunity for recognition. The rate increase for hospitals earning the incentive will go into effect July 1.

If you have questions, contact Brandon Wong, Senior Analyst II, Decision Support, at (Carol Wagner,

Federal Court Decision Blocks Change to Recovery Auditor Contracts

Unfortunately, a federal court has ruled against a change in the process for Recovery Audit Contractors (RACs) that was instituted based on concerns from hospitals and providers. The U.S. Court of Appeals ruled against a new provision by the Centers for Medicare & Medicaid Services (CMS). This provision would have delayed contingency payment for claims denied by the RACs until the second level of the administrative appeals process. Currently, the RACs receive contingency payment upon initial denial, even though high proportions of the denied claims are overturned on appeal, usually many months later. This has been a huge frustration for hospitals which must expend significant resources and wait long periods for payment.

CMS planned to change its new contracts to address concerns that the current payment mechanism provided little incentive for RACs to reduce inappropriate denials. Unfortunately, in its decision, the Court agreed with the argument posed by CGI Federal, the plaintiff, that the provision delaying contingency payment did not meet federal requirements requiring contract provisions based on “customary commercial practices.”

This development may delay CMS’s planned re-contracting of the RACs, though the proposed new contracts may still include other provisions designed to improve accountability under the program. (Andrew Busz, 

HCA Plans Rule Changes for Elective Deliveries and Preventable Readmissions

The Health Care Authority (HCA) announced its intent to begin rulemaking on two items impacting hospital payments. Interested parties can click on the appropriate link for contact information to request being included in the process. 

  • Elective Deliveries. HCA is seeking a rule change to no longer pay for elective deliveries that occur before 39 weeks of gestation, including inductions and cesarean sections. The policy rationale is that full-term deliveries result in healthier babies. This change is consistent with collaborative efforts over the last few years by WSHA member hospitals and physician groups, which have worked together to drastically reduce early elective deliveries. A WSHA graph of Early Elective Delivery Rates is linked here.  
  • Potentially Preventable Readmissions. HCA plans to implement a payment mechanism that would support efforts to reduce potentially preventable readmissions.  Currently HCA can review and potentially deny readmissions that occur within 14 days of discharge. To improve care delivery, HCA intends to move to a program that will create penalties based on potentially preventable readmissions. To do so, it will employ a software product developed by 3M which is currently used in a number of other states. HCA would institute prospective rate penalties for hospitals that experience higher than expected readmission rates. WSHA may assist HCA in pulling together a group of clinical and financial experts from hospitals to provide comments on the proposal. 

Additional details will be shared with WSHA member hospitals as soon as they become available. (Andrew Busz, 

Hospital Presumptive Eligibility Training Now Available Online

Online training for Hospital Presumptive Eligibility (HPE) is now available from the Health Care Authority. HPE allows a hospital to enroll someone in Medicaid for up to 60 days with minimal information from the client. More information on the program is available here. Hospitals must be registered with HCA to be eligible to participate in HPE.  If your hospital has not yet signed up for this program with HCA or if you have questions, please contact Maggie Clay, HPE Program Manager, at (Zosia Stanley,


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