A New Standard for Categorizing and Collecting Non-Claims Payment Data  

Focus Area:
Sustainable Health Care Costs
Mental Health Primary Care Spending Targets

While health care claims-based payment information is fairly standardized and thus easy to capture and analyze, the same cannot be said for non-claims health care spending such as capitated payments or performance bonuses. Without detailed data on non-claims spending, health care spending analyses are incomplete. To facilitate non-claims data collection for California’s all-payer claims database, the Health Care Payments Data (HPD) program, and support goals of the Office of Health Care Affordability (OHCA), such as monitoring the adoption of alternative payment models (APMs), the California Department of Health Care Access and Information (HCAI) developed a new framework to categorize and collect non-claims payment data.  

The Expanded Non-Claims Payment Framework (or Expanded Framework) builds upon two models for categorizing alternative payment models and measuring non-claims spending – referred to here as Health Care Payment Learning and Action Network (HCP-LAN) and Milbank Memorial Fund-Bailit (Milbank). By adopting a broad framework for multiple use cases, HCAI aims to align the data submission process for submitters to HPD and OHCA. In the absence of a national standard for categorizing non-claims payments, our goal is to establish a standardized approach that could be adopted by both state and national all-payer claims databases (APCDs) and state cost growth target initiatives. 

Four coordinated efforts using non-claims payment data are underway at HCAI, each serving a distinct purpose. To support the health care spending growth target program, OHCA will collect data to quantify non-claims payments as part of total spending and to understand the purpose of the spending. Other efforts include collecting non-claims spending to support additional analyses within the HPD, monitoring primary care and behavioral health spending to assess the extent to which the payments support care delivery goals in these areas, and tracking the adoption of APMs across the state. 

The Milbank approach focuses on identifying the purpose of spending, while the HCP-LAN framework categorizes payments based on the level of risk assumed by a provider. To combine and tailor these frameworks to California, HCAI collaborated with Freedman HealthCare and others to create a crosswalk that integrates the Milbank and HCP-LAN frameworks. Subsequently, we refined the Milbank payment categories to align more closely with the nuances of care delivery and payment structures in California, such as the prevalence of professional capitation. We revamped the Milbank structure to present a comprehensive view of risk progression and payment purpose within a broad framework, resulting in the Expanded Framework (See Table). 

While the Expanded Framework features more specificity in its categories and subcategories than the Milbank and HCP-LAN frameworks, it allows for analysis of provider risk by mapping to HCP-LAN categories. For instance, the subcategory, “Population Health and Infrastructure Payments: Practice transformation payments,” is cross-referenced with HCP-LAN category, Foundational Payments for Infrastructure and Operations. This enables HCAI to compare APM adoption in California to other states and national APM adoption goals set by HCP-LAN. Another feature of the Expanded Framework is its comprehensive approach to capitation: Category 4, “Capitation and Full Risk Payments,” includes “primary care capitation” and “professional capitation,” which includes specialty services, among its six subcategories.  

We believe that this comprehensive yet flexible framework could serve as a national standard for categorizing non-claims spending, supporting a range of state and national initiatives that rely on collecting non-claims payment data. States have the option of using the framework to meet their specific needs. For example, for states with lower levels of alternative payment model activity, the top-level categories 1-6 may suffice. For states with little capitation, one or more subcategories may be unnecessary.   

To seek national input on the Expanded Framework, HCAI presented to the National Association of Health Data Organizations (NAHDO) in August 2023 and received positive feedback from other state APCDs. We are working with NAHDO to develop a set of file formats, that includes the Expanded Framework, for collecting non-claims payment data and hope to add it to the All-Payer Claims Database Common Data Layout (APCD-CDL). HCAI also presented the framework to other state cost growth target programs through the Peterson-Milbank Program for Sustainable Health Care Costs. To seek input from California stakeholders, HCAI presented the framework to multiple audiences including California state and private purchasers and regulators, HCAI’s public workgroups and advisory committees, and others (e.g., health plans, providers, consumer advocates).  

OHCA plans to use the Expanded Framework categories (1-6 only, not subcategories) in the first round of total health care spending data collection in Fall 2024 to support its spending target program and will expand its use over time. HCAI is currently drafting regulations for the HPD’s collection of non-claims payment data using the Expanded Framework starting in 2025. 

As a health data organization, HCAI has a history of contributing to, promoting, and adopting national and industry standards for health care data. Standards support common data management practices, minimize administrative burden for health care entities, and enable comparable data for analysis across states and other entities. With the continuing use of APMs by payers and providers, the development of standards for categorizing and collecting non-claims spending has become increasingly important for presenting fair and accurate analyses of health care spending. HCAI seeks feedback from states, federal agencies, and others on the Expanded Framework with the goal of adoption as a national standard for non-claims payment data collection. Feedback can be sent to OHCA@HCAI.ca.gov.  

Special thanks to Jill Yegian, Yegian Health Insights, Wade Iuele, EQUANIM Technologies, and Mary Jo Condon, Freedman HealthCare, who contributed to the development of the Expanded Framework.  

Expanded Non-Claims Payments Framework  

Note: Freedman HealthCare supported the California Department of Health Care Access and Information in developing the Expanded Non-Claims Payment Framework. The framework builds on the work of Bailit Health and the Milbank Memorial Fund and the Health Care Payment Learning and Action Network.

*Descriptions of the corresponding HCP-LAN categories: