The Affordable Care Act
Health Exchanges, Consumer Assistance, and An Evolving
Model for Public & Private Insurance
Healthcare Financial Mgmt. Assoc. – Madison Mini Conference
Madison, WI
October 30, 2013
Junaid Husain
Vice President of Finance
Office: 281.296.1986
Mobile: 617.875.9459
Website: www.cardonoutreach.com
E-Mail: jhusain@cardonoutreach.com
Prevailing ACA Issues
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Prevailing ACA Issues
M a r k e t p l a c e i s O p e n ( K i n d o f… )
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Prevailing ACA Issues
Marketplace Challenges
• Major access and enrollment delays (i.e., Week-1, only 36,000
accessed enrollment page vs. 9.5MM attempts, 0.4% success).
• Forcing consumers to create accounts versus enabling windowshopping (i.e., inefficient bottleneck).
• Inaccurate data has complicated enrollment (i.e., duplicate
enrollments, spouses reported as children, missing data fields,
suspect eligibility determinations, subsidy errors, etc.).
• Integration problems with Federal Data Services Hub (i.e., IRS,
SSA, Homeland Security, etc.).
• Less-than-adequate pre-testing of Healthcare.gov website.
• IT vendor questions regarding design, efficiency, preparedness,
technology obsolescence, etc.
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Prevailing ACA Issues
Early Marketplace Successes
• Despite glitches, overwhelming interest for Federal Marketplace
(i.e., 5X est. traffic, 250,000 simultaneous users).
• 17 state/fed partnership exchanges faring better than FFE—simpler
design, clear language, user-friendly, etc.
• 700,000 applications filled through federal and state exchanges—
official metrics pending in November (but how many enrollments?).
• State exchanges report as many as one-third of applicants are
“young invincibles” (i.e., <30 yrs. old).
• Federal Marketplace adjusting to higher than expected demand—
i.e., expanding band width, more techs, more call-center reps, etc.
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Prevailing ACA Issues
Gov’t Shutdown & Debt Dénouement
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Context: This summer, HHS scaled back income verification
requirements on the Marketplace. Instead of auditing every applicant,
states would audit a statistically significant number of people who
reported incomes that were strikingly different than what federal
records showed.
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Deal: As part of debt/shutdown resolution, two ACA concessions
agreed upon:
Concession #1: HHS Secretary Sebelius must submit a report by
January 1st, 2014 detailing procedures employed by the Marketplace
to verify eligibility for credits and cost-sharing reductions.
Concession #2: HHS Inspector General must submit a report by
July 1st, 2014 regarding the effectiveness of procedures and
safeguards for preventing the submission of inaccurate or fraudulent
information by consumers.
Bottom-Line: Not a material change to income verification rules, rather
an enhancement of accountability structures.
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Prevailing ACA Issues
Communicating with Marketplace Consumers
Current CMS Opinion
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Contact individual consumers about enrolling in a Marketplace plan
only if they’ve asked you to -- or if they’ve contacted you first.
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No phone calls, emails, letters, and social media messages without a
consumer’s permission.
Interpretation
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CMS is okay with proactive calls providing “outreach & education”.
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However, CMS is unenthusiastic about Navigators and CACs providing
“enrollment assistance” over the phone. Must be in-person.
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Over-the-phone enrollment assistance a possibility in 2014+.
Provider Implications: Providers proactively engaged with
marketplace consumers should emphasize outreach & education—but
actual in-person assistance is a requirement for now.
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Prevailing ACA Issues
Presumptive Eligibility (PE)
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Hospital Option: Starting in 2014, ACA gives hospitals the ability to
provide temporary enrollment in Medicaid until the regular application
is reviewed.
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An individual or family can be temporarily enrolled in Medicaid or
CHIP immediately if it appears they are eligible. Required info:
•
Name
•
Household size
•
Estimated monthly income
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Providers are paid the regular Medicaid rate for any services provided,
even if the applicant is later found to be ineligible.
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The Hospital Option is available to providers in all states, regardless
of the states’ Medicaid expansion status.
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Prevailing ACA Issues
PE Implementation
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CFR 42 Sec. 435.1102 (a) (vi) Do not delegate the authority to
determine presumptive eligibility to another entity.
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Implication: Under the strictest interpretation of CMS rules, thirdparty vendors cannot perform PE on behalf of a hospital.
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However, Two Possible Solutions:
1. Medicaid agency could deem third-party vendor a “qualified
entity” under 42 CFR 435.1101.
2. Third-party vendor facilitates back-end mechanics of PE
determination (i.e., screening, information gathering, application
preparation, etc.), but final PE decision is rendered by hospital.
•
Long-Term Solution: CMS has recently become aware of this issue
and is reviewing. Official opinion not expected till early-mid 2014.
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Provider Implication: Until an official opinion is rendered from CMS,
hospitals should proceed with their PE policies based on their risk
tolerance.
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Prevailing ACA Issues
C F R 1 5 6 . 2 7 0 - Te r m i n a t i o n o f C o v e r a g e
Non-Payment of QHP Premiums
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A QHP issuer must establish a standard policy for the termination of
coverage of enrollees due to non-payment of plan premiums.
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A QHP issuer must provide a grace period of three consecutive
months. During the grace period, the QHP issuer must:
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Pay all claims for services rendered to the enrollee during Month-1 of grace
period and may pend claims for Months 2-3 of grace period.
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Notify HHS of such non-payment.
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Notify providers of the possibility for denied claims when an enrollee is in
the second and third months of the grace period.
Provider Implications: Providers may unexpectedly be liable for claims
in Months 2-3 of grace period, unless resolved by resumption of
premium payment.
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Prevailing ACA Issues
Payment of QHP Premiums by Hospitals
Legal & Business Considerations
1. Violation of federal anti-kickback rules—quid pro quo for a patient to
sign up for a particular plan with a network that includes one
hospital, especially if the plan and hospital are integrated.
2. QHP recipients already receiving taxpayer-funded subsidies.
3. Promotion of adverse risk selection, weighing down health plans with
the costliest and sickest patients.
4. Possible confidentiality issues, or violation of the Health Insurance
Portability and Accountability Act's (HIPAA) privacy rules.
Office of Inspector General (OIG)
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Currently, no official OIG opinion on payment of QHP premiums.
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Should providers force the opinion? Two considerations: 1. Opinion is
legally binding for the requestor. 2. Stare decisis (precedent).
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Prevailing ACA Issues
Payment of QHP Premiums by Hospitals
Current CMS Opinion
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No official opinion from CMS, but they are aware of the issue.
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The earliest an official opinion could be rendered is 2014.
Possible Legal Framework
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Providers could set up an arm’s reach third-party independent
foundation or charity.
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Entity would have separate accounting and managerial infrastructure
from the parent provider entity (i.e., set up as a 501(c)(3) entity
under the tax code).
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The 501(c)(3) organization could distribute QHP premiums, without
undue influence from the parent entity.
Provider Implications: Hospitals, health systems, and trade
associations must stay engaged with CMS, HHS, and their elected
representatives to advance this issue.
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ACA 2014 & Beyond
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ACA 2014 & Beyond
CBO Estimates of Exchange Participation
Source: Congressional Budget Office, “Understanding CBO’s Medicaid Coverage Projections under the Affordable Care Act”, Jessica Banthin, June 23, 2013.
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ACA 2014 & Beyond
The Medicaid “Donut Hole”
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ACA 2014 & Beyond
Quantifying the Donut Hole
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ACA 2014 & Beyond
Member “Churn” is a Concern
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Churn: Involuntary movement from one health plan or system to
another.
– Adds complexity.
– Increases administrative costs.
– Disrupts coverage/ continuity of care.
– Reduces incentives to invest in long-term wellness efforts.
– Interferes with quality measurement efforts.
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Historic Medicaid/CHIP concern; but becomes a bigger issue with ACA
implementation in 2014.
– Inevitable consequence of multiple health insurance markets and
subsidy systems.
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Goal: Mitigate and manage churn, but difficult to completely eliminate.
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ACA 2014 & Beyond
The Churn Problem and the Exchanges
Medicaid
6.9M
The Urban
Institute
estimates that
29M will change
eligibility status
per year – equal to
31% of estimated
95.9M Medicaid
and exchange
subsidy recipients
19.5M
3.0M
Exchange
Subsidies
Ineligible for
any assistance
Source: M. Buettgens, A. Nichols, and S. Dorn, “Churning Under the ACA and State Policy Options for Mitigation,” Urban Institute, June 2012.
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