Improving Encounter Data Quality

This is part two of a two-part series on the need to improve encounter data collection and reporting in California. In this post, we discuss the crucial role accurate and complete encounter data plays in a number of California healthcare initiatives and efforts to clarify, standardize, and monitor encounter data collection and reporting statewide.

Just like claims data, encounter data’s original purpose was to capture information to inform payment. But its uses today extend far beyond its original value proposition. Within California’s capitated care arrangements, encounter data serves as the foundation for tracking healthcare quality and costs, monitoring population health and affordability trends, and identifying gaps in care.

Like other data in healthcare, encounter data has historically been fragmented and inconsistent because of complexity, administrative burden, and a lack of standardization in reporting requirements. That’s why a unified effort to clarify, standardize, and monitor the collection and reporting of encounter data statewide has been essential and remains ongoing.

Here are a few examples to show what improving encounter data can do to support current healthcare initiatives in California:

Closing care gaps for patients

Because encounter data captures both patient diagnoses and services rendered, it serves as an important source of information for care referrals and care coordination. Medi-Cal’s Enhanced Care Management benefit, provided through the California Advancing and Innovating Medi-Cal (CalAIM) program, illustrates this function well. By recognizing and treating the social drivers of health through person-centered interventions and community-based care management, the Enhanced Care Management program is helping improve patient outcomes and close health disparities. 

Recognizing the important role of encounter data in the success of the Enhanced Care Management benefit, DHCS has been providing funding to build and expand encounter data capacity and infrastructure through the Providing Access and Transforming Health (PATH Program). The funding program ensures stakeholders such as managed care plans (MCPs), providers, community-based organizations, and others can comply with the encounter data reporting requirements of ECM participation. From both the referral and the provider payment perspectives, complete and accurate encounter data is vital to the success of the Enhanced Care Management benefit. The MCPs use encounter and claims data to identify patients who are eligible for Enhanced Care Management based on their complex needs. In return, the clinicians providing the Enhanced Care Management must send back encounter data to the MCP to demonstrate services rendered. Missing or incomplete encounter data could lead to lost revenue for participating providers and missed opportunities for MCPs to identify patients who may be eligible for the Enhanced Care Management benefit. 

Evaluating impact of CalAIM and new Medi-Cal managed care contracts

While complete and accurate encounter data is required by Medicaid managed care regulation from a federal standpoint, it’s especially pivotal for Medi-Cal initiatives. These transformations include CalAIM, Medi-Cal Managed Care contracts, and DHCS’ Comprehensive Quality Strategy.

Palav Babaria, MD, Chief Quality Officer at DHCS, highlighted the role of encounter data to evaluate the progress of CalAIM during a presentation at a 2022 California Primary Care Association conference. Additionally, the California State Auditors Office’s Follow-Up Report on Children in Medi-Cal, published in September 2022, included improving the accuracy of DHCS’ encounter data as one of eight recommendations to ensure that children in Medi-Cal receive critical preventive health services. High-quality and comprehensive encounter data remains essential for gauging progress toward goals of improving equity, quality, access, and transparency.

Improving value for Californians with Commercial and Medicare Advantage coverage

Many Californians with commercial and Medicare Advantage coverage receive care from providers taking on financial risk through population-based capitation payments. For these providers, the risk scores of their assigned patient population may impact their capitation payments, and can also impact performance incentive revenue, where performance benchmarks are often risk-adjusted.

Whether it’s through NCQA HEDIS reporting or through alternative payment models like IHA’s Align. Measure. Perform. (AMP) incentive design, inaccurate population risk scores undermine the accuracy of utilization and cost measures, which in turn impacts performance incentives. Knowing that risk scores are calculated using encounter data, AMP first introduced an encounter data quality measure in its measure set in 2007 and has expanded this component of quality measurement since then. Tracking encounter data quality helps providers and health plans participating in the AMP program better understand their population risk scores and, ultimately, their results relative to industry benchmarks.

Improving administrative burden for providers

From an administrative standpoint, errors, rejections, duplications, and other data challenges create more work for provider organizations, especially for billing and front office staff. These data challenges are burdensome, but even more so when a provider has contracts with multiple managed care plans, whose processes for resolving issues may be different. Easing the administrative burden through increased standardization and technical assistance is essential for supporting a healthcare workforce facing ongoing administrative pressures.

The implementation of California’s All-Payer Claims Database

The Health Care Payments Database, California’s All Payer Claims Database, aggregates encounter and claims data from multiple payers to provide a unique view across the entire market. The information helps regulators understand how the market is functioning and what’s working and not working. Finally, with the California Office of Health Care Affordability and an increased emphasis on providers and health plans sharing financial risk, regulators increasingly rely on encounter data to understand cost trends and drivers of spending.

Work worth doing

Improving encounter data quality is a significant undertaking — one that requires comprehensive education and technical assistance, standardized reporting requirements, and the ability for stakeholders to track progress and identify encounter data gaps over time.

As the Encounter Data Governance Entity, IHA worked in collaboration with other industry partners to advance these goals, drawing on our multistakeholder governance model and experience solving complex, industry-wide challenges. The resources and tools developed through that effort, including practical guidance for health plans, providers, and other stakeholders, continue to be available as the work is carried forward.