The Department of Health & Human Services has revised applications for people seeking to enroll in a healthcare exchange. The shorter forms are now three pages long for individuals and seven pages long for families.
This Time article provides some background.
One of the notable revenue provisions included in the Patient Protection and Affordable Care Act (ACA) is an excise tax on the health insurance industry that will be assessed annually starting in 2014.
This report provides an independent analysis of the ACA health insurer fee provision’s impact on the United States health insurance industry.
Accountable care organizations (ACOs) and patient-centered medical homes (PCMHs) may provide nurses with greater career options. In this Nurse Zone article, Milliman’s Patty Jones discusses some new roles opening up for nurses skilled in care coordination and data analysis.
Here is an excerpt:
“Accountable care and a lot of the initiatives coming out of health reform provide some interesting and new opportunities for nurses,” said Patty Jones, RN, [MBA], a principal at Milliman, a consulting and actuarial firm in Seattle, adding that the positions will take advantage of skills nurses already have and necessitate some to develop new talents.
…“For an accountable care organization to be successful, they are tasked with coordinating the needs of a member or a patient over a series of services and different levels of care over the course of time,” said Jones, explaining that efforts will focus on case managing smoother transitions between settings and ensuring the patient takes prescribed medications and follows through with appointments to avoid re-hospitalizations.
“This is a natural place for nursing and nurse leaders to use skills in terms of care coordination and assist the patient to reach out and get attached to other levels of care,” Jones said.
Newer emerging roles, Jones said, involve patient education and engagement. But the teaching must take place within the framework of the patient’s readiness to learn and motivation for changing to a healthier state.
“It’s a coming together of the science and psychology of nursing,” Jones said.
A third area of opportunity for nurses involves resource management at the patient and organization level, not something all nurses are skilled at or interested in.
“There are real opportunities for clinical leaders, nurses included, to be part of the financial and resource management discussion,” Jones said.
Additionally, nurses will need a population view, similar to a public health approach, to identifying and closing gaps in preventive care. However, it will require an analytic mind and comfort with data.
For more perspective on how healthcare’s changing landscape is affecting nursing professionals, click here.
As we draw closer to 2014 and full implementation of the Patient Protection and Affordable Care Act (ACA), many healthcare companies are evaluating how their existing capabilities translate into a post-reform environment. Some find that implementation of an exchange product would be a simple addition to a product portfolio, while others are building operational infrastructure specifically to support the exchange. Two previous posts described critical factors for success and common gaps. In this article, we focus on the qualified health plan (QHP) application itself.
Applications to join healthcare exchanges vary by market and type of exchange in a state. While there is a large volume of application activity taking place now for pioneers in the exchange market, other players will likely take part in later application opportunities in the years to come.
States were given a choice to either develop their own programs or elect to participate in a federally sponsored program. State programs are administered many different ways. Approaches range from conducting a standard product filing approach where all licensed health plans are accepted, to administering a competitive proposal process where only a subset of applicants are accepted.
Regardless of the approach in your market, these top five application response principles and project management practices can be applied.
1. Understand requirements. In order to obtain QHP status, proposed plan designs must include essential health benefits (EHBs) prescribed by the federal government. Additionally, depending on market location, some plans can operate their exchange business under existing licensure, while others must file for licensure specific to the exchange. It is critical to first understand market-specific requirements and then understand what is required in the application response. The response may be data- and price-driven, or may include more detailed requests for information about operational, technical, product, network, and price factors. Technical response format requirements can also vary.
2. Develop a work group. Gather a team of subject matter experts (SMEs) that can both provide support to the application response process and stay engaged through implementation of the exchange product. SMEs may include consultants who are well versed in implementing business in new market segments.
3. Determine accountability by requirement. Assign ownership early in the process so that team members are best positioned to support a quality response. One good way for managing work assignments is to develop a work assignment matrix that captures all requirements and assignments. The matrix can also serve as a checklist for application completeness.
4. Set rigorous draft response timelines. The subject matter and content contained in a QHP solicitation or application will be new territory for even the most experienced health plan. Giving SMEs an aggressive timeline to provide draft responses provides stakeholders more time to react to the ideas of the team as well as more time to refine and perfect responses.
5. Provide guidelines for response content. It is a fair assumption that many content writers who are providing input to an exchange application have not participated in a similar work effort in the past. In that case, it is a good idea to provide guidance regarding critical areas contributing to the completeness and quality of content. Examples of response content guidelines include:
• Accuracy: The question was answered and the response is free of ambiguity.
• Completeness: If the question is yes/no, the answer has gone beyond a yes/no response. If there are multiple questions, all points have been addressed.
• Audience focus: The answer does not contain internal jargon or acronyms.
• Solution focus: The customer’s needs have been considered in the response.
• Verifiability: If the response requires attestation, evidence is demonstrated to support it.
A previous post described five critical factors for health insurers to implement in order to successfully sell qualified health plans (QHPs) on new exchanges created by the Patient Protection and Affordable Care Act (PPACA) starting in 2014. As that piece described, departments across the organization will need to support the new program. This post describes five organizational gaps commonly standing between a QHP issuer and exchange readiness.
1. Licensure and accreditation. Regardless of the type of exchange (state-based, federal/state partnership, or federally facilitated), QHP issuers must be appropriately licensed by their states. This requirement will not only affect new health plans. Depending on their present business mix, even established health plans may not possess the proper license from the relevant state authority in order to sell on the exchange. Issuers must also meet stringent accreditation requirements, which may include National Committee for Quality Assurance (NCQA) or URAC accreditation; this process should be started immediately if not already underway.
2. Marketing and distribution. As with any new product, health plans must decide what their target markets will be and assess their abilities to reach them. Keep in mind that the exchange is not the only distribution channel for QHPs; organizations selling on the exchange may also be required to make these plans available outside of the exchange. A unique aspect to marketing in this environment is the navigator program. As described in the “Five critical success factors” post, there is significant variation among navigator programs in different states. Understanding and complementing their roles within plan distribution models will be important. In addition, when preparing for sales outside of the exchange, a successful plan must evaluate, augment, and educate its existing broker network appropriately.
3. Systems and reporting. Although many issuers will rely on their existing information systems for activities such as claims processing or call center operations, some information technology requirements will be new. Most significant is the ability to transfer data between the health plan and the exchange, as well as to reconcile enrollment records between the two. Financial systems will also be impacted. While individual customers will remit payment directly to insurers, Small Business Health Options Program (SHOP) customers may be billed by the exchange. A further layer of complexity is added by federal premium subsidies paid in advance directly to issuers, meaning that issuers must have systems in place to receive and process accounts receivable from at least three different sources. Finally, the health plan must possess the tools and capacity for developing a robust reporting and analytics package that will aid in understanding and monitoring business trends as new membership is acquired.
4. Network and medical management. QHP issuers should evaluate the mix of their provider networks to ensure they meet the needs and expectations of the target population and comply with regulatory requirements. In particular, networks must include a sufficient number of essential community providers (ECPs) and meet access criteria by geographic region. Many organizations are exploring narrow network strategies to keep their premiums competitive. Narrow network design requires sophisticated analytics to identify the optimal mix of providers needed. Network reimbursement strategies and new risk arrangements with providers should also be considered for those health plans for which the exchange market represents a significantly different risk environment. In addition to network, medical management may require additional resources to effectively manage plan costs and support and manage the needs of the new membership, which will include newly insured beneficiaries who may drive higher utilization for a period of time.
5. Operational execution. Of course, filling the gaps described above and others will require additional training and, in many cases, additional staff too. Successful QHP issuers will be prepared to invest resources and time across departments to support membership growth as well as new systems and processes associated with exchange participation.
Beginning in October 2013, open enrollment will commence for individual and small group health insurance plans being sold on public exchanges, new marketplaces created by the Patient Protection and Affordable Care Act (PPACA). Because there are still many unknowns regarding how the new market will function, plans must be prepared to work aggressively to position their strategies and resources for initial launch and ongoing operations. The following five tactics are recommended for organizations that plan to offer qualified health plans (QHPs) on public exchanges.
1. Strategy alignment. As with any new line of business, an important first step is to ensure that the strategy of the exchange program serves that of the organization as a whole. For example, will the product compete primarily on price, quality, or access to best enhance the company’s overall marketing and network strategies? The leadership team must be clear about the reasons for entering the exchange and the potential effects it will have on the company’s marketing, finances, and operational performance.
2. Having a champion. Successful QHP issuers will formally identify a senior program lead within their organizations to advocate for exchange participation among internal and external stakeholders. From operational planning through public positioning, this person will clearly communicate the program’s goals and progress, how exchange participation contributes to the overall strategy and mission of the organization, as well as the needs of the stakeholders it serves.
3. Cross-functional team engagement. Adding exchange business to a company’s program portfolio will require input and implementation efforts from employees across the organization. For instance:
• IT resources must be invested to establish infrastructure for transferring and reconciling enrollment data between the exchange and the health plan
• Member services must be staffed and trained to serve a newly insured population likely to have questions about the unfamiliar products, cost sharing, and premium subsidies
• Sales and marketing, product development, medical management, network management, finance, accounting, compliance, and human resources will all be affected as well
Successful exchange participants will devote resources to performing operational gap assessments and develop gap closure strategies, as well as appoint a multidisciplinary core management team to coordinate activities across functional areas.
4. Defining success. A key responsibility of the core management team is to create clearly defined performance metrics for the exchange program. These goals must be specific yet flexible to adapt to continuously evolving regulatory requirements and market factors that will remain uncertain until exchanges reach a mature operational status. For instance, financial and enrollment projections may need to adjust quickly if more small employers than previously predicted decide to seek coverage through the Small Business Health Options Program (SHOP) market rather than through traditional channels.
5. Public policy involvement. At both the state and federal levels, policy surrounding exchanges is constantly being created and refined. While the federal Department of Health and Human Services (HHS) publishes guidance that affects exchanges and issuers nationwide, many details regarding how the exchanges will function, how plans can be designed and marketed, and more are defined at the state level. For example, in Maine, exchange navigators are required to be licensed brokers, while California is considering allowing nonprofits, trade organizations, and schools to help fill the navigator role. The government relations department can help shape emerging policy decisions and stay close to the discussions at all levels so that the rest of the organization can respond quickly to new developments.
For those states establishing insurance exchanges under the Patient Protection and Affordable Care Act (PPACA), all payor claims databases (APCDs) can provide much of the data needed for two of the key components of an exchange: a transitional reinsurance program and a permanent risk adjustment program. Both are critical to minimizing the effects of adverse selection that may occur in the initial years of operation of and during implementation of market-wide insurance reforms.
Transitional Reinsurance Program
The purpose of a transitional reinsurance program is to help stabilize premiums for coverage in the individual market during the years 2014 through 2016. The PPACA Transitional Reinsurance Program is an important element in helping states to level the playing field across the non-group health insurance market, to moderate premium changes from the implementation of insurance reforms both inside and outside of exchanges, and to set the foundation for the establishment of the exchanges. Under this program, reinsurance would be based on high-cost enrollees’ claims, and not on a list of medical conditions. The data contained in APCDs can be utilized to establish the attachment points of the high-cost enrollees and help to better define the upper limits of the coinsurance amounts.
In a bulletin of May 31, 2012, entitled, “Transitional Reinsurance Program: Proposed Payment Operations by the Department of Health and Human Services,” the U.S. Department of Health and Human Services (HHS) suggested that, in order to derive the reinsurance payment calculations, a minimum amount of data is necessary, which would contain the following:
| Data Types | Data Elements | Use of Data Types |
| Enrollee-level data | Enrollment effective dates Enrollment plan type Location (e.g., zip code, geographic rating area or both) |
Reinsurance payments calculation Verification of data State parameters selection for reinsurance payments calculation |
| Plan-level data | Benefit year Individual versus small-group |
Reinsurance payments calculation Verification of data |
| Medical claims data | Date of service Paid claim amount |
Reinsurance payments calculation Verification of data |
| Pharmacy claims data | Date of service Paid claim amount |
Reinsurance payments calculation Verification of data |
All of the data elements suggested by HHS reside in a typical APCD and would be available for most commercial healthcare payors operating in a state. To minimize the data collection burden, HHS would like to leverage commonly used data elements from existing claims data standards. This could be accomplished in a comprehensive cost-effective manner with data provided by an APCD.
How will the Patient Protection and Affordable Care Act (PPACA) affect employer-sponsored health insurance? Employers have to consider whether they want to preserve their existing coverage, self-insure, or pay fines for suspending coverage. That decision may hinge on an employer’s ability to maintain affordable costs while offering minimum coverage.
Paul Houchens recently discussed affordability and PPACA’s minimum benefits compliance with Healthcare Payer News. Here is an excerpt from the article:
Across industries, the main challenge will be having minimum coverage and keeping it as affordable as possible…
Wellness benefits across corporate and small firms vary from tobacco cessation programs to on-site fitness centers, free produce and commuting perks. For ACA minimum benefits compliance, though, it’s still not clear how exactly the affordability test will be measured against wellness incentives, said Paul Houchens, an Indianapolis-based consulting actuary with Milliman.
“Let’s say you have a plan that charges $2,000 for single coverage without wellness incentives, but $1,000 if you’re a non-smoker. Is that affordability going to be measured based on the $2,000 or that $1,000? Particularly for employers with large wellness incentives in their plans, it’s difficult to do a lot of planning without having that information.”
More broadly than wellness, Houchens sees employers probing the value of their current sponsored insurance and calculating the costs and benefits of different options, as federal agencies finalize rules for the individual and employer mandate, premium assistance and eligibility.
If all of an employer’s workers are above 400 percent of the federal poverty level (FPL), Houchens said, “None of them are going to qualify for premium subsidies and probably in a lot of cases are going to be paying a lot more for health insurance under exchanges than they would under (their) plan.” Or “if you have an employer with dominantly low-income employees, maybe some would actually be better off in the exchange versus your employer plan.”
While the level and relative affordability of coverage will probably vary by industry and income, Houchens and colleagues think that the cost of dropping coverage is likely to outweigh the savings.
“Even for some of the low-income employers, I think a key point to remember is that your health insurance is a tax-deductible expense, whereas the penalties are not,” Houchens said. “That’s a huge difference for the for-profit companies. And also, you’re being penalized on every full-time employee. You’re not just being penalized on the people that would participate on your plans.”
A company with 60 percent health plan participation is “really only paying for health insurance for 60 percent of employees,” he said. “But with the exception of the 30 employee exemption, you would be paying a penalty on 100 percent of the full-time employees; that’s non-tax deductible. We’ve run the calculations for a number of employers. The math of terminating coverage and trying to make them whole, it simply doesn’t add out. So employers are thinking prudently. They’re probably going to continue to offer coverage in 2014.”
Download Milliman’s Healthcare Reform Strategic Impact Study which helps answer important reform questions employers are dealing with.
Also, for more of Paul’s insights on healthcare reform, follow him on Twitter @PaulHouchens.
A.M. Best recently interviewed Bob Cosway about the challenges of defining essential health benefits (EHB) in each state. Under the Patient Protection and Affordable Care Act, insurers must provide plans that include these EHBs when marketing to the state health exchanges.
The pressure on Medicare Advantage (MA) plans to ensure that risk scores appropriately reflect the health status of their population under the Patient Protection and Affordable Care Act (PPACA) continues to increase. Payment rates from the fee-for-service (FFS) phase-in as well as changes in star ratings for MA plans have been impacted.
The Centers for Medicare & Medicaid Services (CMS) assigns a risk score to every MA member based on the member’s characteristics, including age, gender, disability status, Medicaid status, and “health” status. The majority of revenue received by MA plans is based on the risk scores of their members, and the health status is the primary variable in the calculation of the risk score.
CMS determines the diseases/hierarchical condition categories (HCCs) for each member based on ICD-9 diagnosis codes. Identifying and submitting all appropriate ICD-9 diagnosis codes to CMS results in a higher risk score for the member and an increased payment to the MA plan.
This article, first published in the October 2012 issue of the Society of Actuaries’ Health Watch newsletter, discusses accurate diagnostic coding as an important revenue tool.
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