Risk Adjustment Data Collection Frequently Asked Questions (FAQ)
1. Why is MDH collecting additional data?
The 2013 Minnesota State Legislature directed the Minnesota Department of Health (MDH) to study the feasibility and potential costs and benefits of conducting state-based risk adjustment in Minnesota’s small group and individual health insurance markets. MDH was directed to:
(1) Evaluate the extent to which Minnesota’s All- payer Claims Database (MN APCD) data could be used for conducting state-based risk adjustment;
(2) Collect data needed for the study;
(3) Conduct modeling to determine if a Minnesota- based risk adjustment model can perform better and be more cost-effective than the federal risk adjustment model; and
(4) Submit a report to the Legislature outlining the study recommendations.
As part of the study, MDH is authorized to collect from health plans all data necessary for conducting risk adjustment with standard risk adjusters (Laws of Minnesota 2013, chapter 108, article 1, section 65).
In order to fulfill its legislative mandate, MDH is requesting additional enrollment-level data that is not currently captured in Minnesota’s All-payer Claims Database (MN APCD) but that is needed to study the feasibility of a state-based risk adjustment approach.
2. Why is this project important?
Risk adjustment is important for the small group and individual health insurance markets following passage of the Affordable Care Act (ACA) and the introduction of modified community rating in these markets, in which premiums are the same regardless of a person’s health status. In this way, risk adjustment is intended to stabilize premiums, provide health plans with the ability to offer a variety of plans to meet the needs of a diverse population, and account for the effects of adverse selection (where a health plan may receive a disproportionate share of enrollees with immediate or complex health needs).
Additionally, risk adjustment has important implications for patients, especially those with special or complex needs, as a way of ensuring equal access for all to health insurance coverage and to avoid creating incentives for health plans to avoid “riskier” enrollees. Similarly, as risk adjustment has the potential to transfer a significant level of funds between carriers, plans have a strong interest in a robust risk adjustment methodology that accurately and effectively accounts for risk selection.
MDH and Milliman will study whether state-based risk adjustment has the potential to help in achieving these and related policy goals by allowing the State to customize a methodology that meets the unique characteristics of Minnesota’s health insurance market and is cost effective relative to the current operation of risk adjustment by the federal government.
3. How will MDH use these data?
MDH and its actuarial vendor, the New York office of Milliman, will be using the additional member-level enrollment data to link to enrollment, medical, and pharmacy claims data currently contained in the MN APCD. The additional data will be used for two purposes: 1) to help evaluate whether data in the MN APCD is suitable for risk adjustment; and 2) to allow Milliman to assess the performance of potential state-based alternative models compared to the federal risk adjustment model which is currently in use in Minnesota today and operated by the federal government.
4. Why does MDH require this data to complete the study?
MDH was authorized to request data covering the time period of October 1, 2013 to December 31, 2014 for the purposes of carrying out this study. Currently, the MN APCD does not capture certain key data elements needed to identify plans that are subject to risk adjustment under the Affordable Care Act, such as a market indicator to identify plans in the small employer group or individual health insurance market, and the authorizing legislation for this study anticipated MDH’s need to collect additional data in order to conduct a robust analysis.
MDH and Milliman need to identify plans that will be subject to risk adjustment in order to identify claims that will be used in the actuarial modeling. Additionally, the MN APCD does not include all data elements needed to adequately compare the performance of a state-based risk adjustment model to the federal risk adjustment model. For example, the federal risk adjustment methodology has separate risk weights for carriers of different metallic tiers. Plan metal level is not a data element that is currently contained in the MN APCD, and thus MDH has been working with health plans on the submission of these additional data elements where necessary and developing means to derive them from data or information previously submitted where possible.
Based on consultation with carriers and other stakeholders, MDH, Milliman, and MDH’s MN APCD data aggregation vendor, Onpoint, have streamlined the data request to include the minimum number of data elements necessary to evaluate state-based risk adjustment. A number of data elements that were initially proposed to have been collected have been dropped from the final request, based on carrier feedback.
5. What is the timeline for the data request?
In mid-May, MDH, supported by Onpoint, will be providing data submitters with a data submission guide outlining the additional data elements that will be collected and their specifications. Onpoint will also provide carriers with a standalone “hashing application” which will encrypt the information, and will set up and test the connectivity for each data submitter. MDH and Onpoint will hold a webinar to provide support to health insurance carriers and to answer any technical questions about the data request. Health insurance carriers will have eight weeks to submit data to Onpoint.
Risk Adjustment Additional Data Request Timeline
Activity / DateMDH provides health carriers with a data submission guide outlining required data elements for the risk adjustment data file / 5/21/2015
MDH, Onpoint and Milliman conduct a webinar to discuss the data submission guide and request: Meeting Information (http://www.health.state.mn.us/divs/hpsc/hep/riskadjustment/rameetingdates.html) / 6/4/2015
Onpoint provides support and documentation to submitters, including “stand alone” hashing application / 6/5/2015
Onpoint sets up and tests connectivity with each data submitter (SFTP and PGP encryption). / 6/19/2015
Onpoint receives encrypted data files from submitters and applies data quality process / 7/1/15 to 7/30/2015
Onpoint delivers risk adjustment data files to MDH for analysis / 8/28/2015
6. How will MDH ensure data privacy and security for additional data?
Ensuring data privacy and security is a top priority for MDH. The additional data collected will be subject to the same safeguards as data currently in the MN APCD. Minnesota law requires the encryption of all personally identifiable information. MDH’s data aggregation vendor, Onpoint, will provide all data submitters with a one-way hashing application which will encrypt all personally identifiable information before it reaches Onpoint’s systems. Information from all data submitters are encrypted using the exact same process, which generally facilitates the ability to trace care across payers and deliver system settings.
Once the additional data reaches MDH, it will be housed on secure servers that are only accessible by approved users. State of the art software and hardware solutions are in place to further protect the data. Furthermore, analysts who work with the data are prevented from intentionally or unintentionally removing detailed information from the storage environment.
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