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Insurers Doubt Feds HIX Readiness

 |  By jfellows@healthleadersmedia.com  
   February 27, 2013

Health plans are prepared to partner with health insurance exchanges (HIX), but are not optimistic the state and federal government will have the new exchanges ready by the October deadline.

Edifecs, a Bellevue, WA-based healthcare information technology firm, surveyed 100+ healthcare executives from commercial insurance plans, providers, government agencies, and other healthcare-related organizations at its three-day Healthcare Mandate Summit in Austin, TX, this month. The results show that 80% of respondents plan to participate in exchanges in 2014; only 5% said they would opt out of participating entirely.

An accompanying report (PDF) to the survey indicates health plans are not only planning to participate, but they are putting resources into getting ready for the exchanges. Seventy-eight percent of respondents report having an HIX project team on board to work with the different exchange models.

As of now, most states are shunning federally run exchanges. Only seven have decided to pursue a partnership with the feds, while 16 states, plus the District of Columbia, will operate a state-based exchange.

Representatives from Colorado and Washington held a presentation on the status of their exchanges, both of which will be a state-run model. Jamie Gier, vice president of corporate marketing at Edifecs, says participants at the summit wanted to find out how to get information from states about how their exchanges will be run.

"To date, most payers haven't received much information from the state HIXs, and this is incredibly problematic for those insurers planning to participate in 2014. They have IT system and business process changes to implement to ensure they are ready on day one, and those changes depend on information," says Gier.

That uncertainty bears out in the survey, which shows a significant number of survey respondents—70%—saying they feel confident that they are prepared or will be prepared for open enrollment in October, but their confidence does not extend to the readiness of the federal government or other exchange models.

Only 29% reported being certain that the exchanges would be ready to launch October 1. Overwhelmingly, 70% indicated concern over the issue of whether exchanges would be ready to enroll millions of Americans who are expected to use the exchange to find insurance.

Gier says states and insurers can learn from Colorado and Washington. She holds them up as good examples of seamless collaboration with the insurers in their states, saying they took a "share early, share often" approach with payers.

Another reason insurers have doubts about the federal and state readiness is likely due to the rolling deadlines for several key components needed to build an HIX, including states committing to one of three models: state-run, state-federal partnership, and federally run.

The Centers for Medicare & Medicaid Services (CMS) extended the deadline for states at least twice, and even now, if states wanted to change models they could. The federal government did not envision running most of the exchanges and some states may be poised to take advantage of the government's willingness to hand off some of the responsibility.

States and insurers have also been waiting on other key details, such as the final rule for essential health benefits, which only got released a week ago. These are the benefits that, under the Patient Protection and Affordable Care Act (PPACA), insurers have to give patients who participate in the individual and small-group market next year.  

According to the final rule, an EHB package must be "equal in scope" to benefits offered by a typical employer plan and must include at least the following 10 EHB categories:

  1. Ambulatory patient services
  2. Emergency services
  3. Hospitalization
  4. Maternity and newborn care
  5. Mental health and substance use disorder services, including behavioral health treatment
  6. Prescription drugs
  7. Rehabilitative and habilitative services and devices
  8. Laboratory services
  9. Preventive, wellness services, and chronic disease management
  10. Pediatric services, including oral and vision care

States will still maintain regulatory control over how the plans that participate in the exchanges will meet the EHB requirements, but now that the final rule has been issued, insurers can start to design the plans they will offer and set prices.

The building blocks of the plans, prices, and infrastructure depends on data, and that, says Gier, is something insurers are worried about, specifically, reconciling records.

"Historically, insurers have maintained a single system of record for member enrollment, claim and payment information," says Gier. "Now, however, insurers will need to reconcile their detailed member records with those maintained by the HIX on at least a monthly basis. They also have to verify that the information contained in both systems is accurate to confirm eligibility, credit premiums, ensure correct payments and provide good customer service."

Digging into the daily details of how these exchanges will work illustrates the complexity of the systems needed to keep the numerous networks of information running smoothly. The collaborations required also illustrate the delicate balance states have to maintain with insurers and providers.

"Another concern is the potential for ongoing change to HIX formats and standards. As each HIX gets up and running, there will be fixes and changes to make things run more smoothly," says Gier.

"All of those will require adjustments by the insurers to maintain interoperability with the HIX systems and business processes. Insurers will need to make sure whatever system they use is flexible enough to accommodate all of the inevitable changes coming down the road after implementation."

The survey also reports that most health insurers (55%) plan on being part of more than one HIX. That means an even heavier reliance on IT systems that can maintain interacting with multiple sets of requirements, based on the HIX model. However, most insurers saying they'll participate in more than one exchange is a key take away, and perhaps an indication of the confidence healthcare organizations have in finding more opportunities than challenges in the new health insurance exchanges.

Jacqueline Fellows is a contributing writer at HealthLeaders Media.

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