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.