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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 an effort underway 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, a vital function for ensuring financial transparency and sustainability for healthcare stakeholders – including patients. 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 is critical.

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

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, which California managed care plans (MCPs) began implementing in 2022 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 ensuring the success of the Enhanced Care Management benefit, DHCS is providing funding to build and expand encounter data capacity and infrastructure through two programs: Providing Access and Transforming Health (PATH Program) and the Incentive Payment Program (IPP). Both funding programs are designed to ensure stakeholders such as MCPs, providers, community based organizations and others can comply with the encounter data reporting requirements of ECM participation. After the first measurement year, MCPs participating in the IPP may be rewarded for meeting quality metrics related to encounter data submission compliance.

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 can 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. In this context, missing or incomplete encounter data could lead to lost revenue for participating providers and missed opportunities for MCPs to identify patients with complex needs who may be eligible for the Enhanced Care Management benefit. Unfortunately, the use of encounters in the Enhanced Care Management is still a work in progress. Within a few months of its launch, ECM providers — particularly those who contract with multiple MCPs — are citing challenges navigating policies and processing procedures for referrals and billing. These challenges highlight the need for further support, training, and standardization in encounter data submission, as well as the need for the funding support referenced above. 

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 as it embarks on significant transformations. These transformations include CalAIM, new Medi-Cal Managed Care contracts taking effect in 2024, and DHCS’ new Comprehensive Quality Strategy.

Palav Babaria, MD, Chief Quality Officer at DHCS, highlighted the role of encounter data to evaluate the progress CalAIM during a presentation at California Primary Care Association’s 2022 Virtual Quality and Technology conference. Additionally, the California State Auditor’s 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 preventative health services. Without high-quality and comprehensive encounter data to track population health and service delivery trends, stakeholders will have a hard time gauging progress toward its goals of improving equity, quality, access, and transparency.

Quote graphic citing Palav Babaria MD 2022

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. 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 organization, 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. Taking steps to ease the administrative burden through increased standardization and technical assistance is essential for supporting California’s healthcare workforce, especially in light of widespread healthcare worker burnout, labor shortages, and staff turnover.

The implementation of California’s All-Payer Claims Database

The 2023 launch of California’s All-Payer Claims Database, known as the Health Care Payments Data Program, will aggregate encounter and claims data from multiple payers to provide a unique view across the entire market. The information will help 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 will increasingly rely on encounter data to understand cost trends and drivers of spending.

Work worth doing

Improving encounter data quality is a significant undertaking and won’t be solved overnight. It requires comprehensive education and technical assistance on the data submission process and coding, standardizing reporting requirements. Stakeholders also need the ability to track progress and identify gaps in their encounter data quality, and use this information to optimize workflows.

As the Encounter Data Governance Entity, IHA, in collaboration with other industry partners, is drawing on our multistakeholder governance model and our experience solving complex, industry-wide challenges to move the needle on encounter data. We’re committed to coordinating solutions and alignment to not only better serve Medi-Cal enrollees but all Californians. Central to the effort is IHA’s Encounter Data Resource Hub, where providers, health plans, and other stakeholders can easily access promising practices, helpful tools, and easy-to-use guidance.

Browse our Encounter Data Resource Hub