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The Affordable Care Act Health Exchanges, Consumer Assistance, and An Evolving
Model for Public & Private Insurance
Junaid Husain Office: 281.296.1986 Website: www.cardonoutreach.comVice President of Finance Mobile: 617.875.9459 E-Mail: [email protected]
Healthcare Financial Mgmt. Assoc. – Madison Mini Conference
Madison, WI
October 30, 2013
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Prevailing ACA Issues
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Marketplace is Open (K ind of…)
P r e v a i l i n g A C A I s s u e s
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• 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 window-shopping (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.
Marketplace Chal lenges
P r e v a i l i n g A C A I s s u e s
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• 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.
Ear ly Marketp lace Successes
P r e v a i l i n g A C A I s s u e s
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Gov’t Shutdown & Debt Dénouement
P r e v a i l i n g A C A I s s u e s
• 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.
• 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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Communicat ing wi th Marketp lace Consumers
P r e v a i l i n g A C A I s s u e s
Current CMS Opinion
• Contact individual consumers about enrolling in a Marketplace plan only if they’ve asked you to -- or if they’ve contacted you first.
• No phone calls, emails, letters, and social media messages without a consumer’s permission.
Interpretation
• CMS is okay with proactive calls providing “outreach & education”.
• However, CMS is unenthusiastic about Navigators and CACs providing “enrollment assistance” over the phone. Must be in-person.
• 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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Presumptive E l ig ib i l i ty (PE)
P r e v a i l i n g A C A I s s u e s
• Hospital Option: Starting in 2014, ACA gives hospitals the ability to provide temporary enrollment in Medicaid until the regular application is reviewed.
• 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
• Providers are paid the regular Medicaid rate for any services provided, even if the applicant is later found to be ineligible.
• The Hospital Option is available to providers in all states, regardless of the states’ Medicaid expansion status.
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PE Implementat ion
P r e v a i l i n g A C A I s s u e s
• CFR 42 Sec. 435.1102 (a) (vi) Do not delegate the authority to determine presumptive eligibility to another entity.
• Implication: Under the strictest interpretation of CMS rules, third-party vendors cannot perform PE on behalf of a hospital.
• 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.
• 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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CFR 156.270 - Terminat ion of Coverage
P r e v a i l i n g A C A I s s u e s
Non-Payment of QHP Premiums
• A QHP issuer must establish a standard policy for the termination of coverage of enrollees due to non-payment of plan premiums.
• A QHP issuer must provide a grace period of three consecutive months. During the grace period, the QHP issuer must:
• 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.
• Notify HHS of such non-payment.
• 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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Payment of QHP Premiums by Hospi ta ls
P r e v a i l i n g A C A I s s u e s
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)
• Currently, no official OIG opinion on payment of QHP premiums.
• Should providers force the opinion? Two considerations: 1. Opinion is legally binding for the requestor. 2. Stare decisis (precedent).
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Payment of QHP Premiums by Hospi ta ls
P r e v a i l i n g A C A I s s u e s
Current CMS Opinion
• No official opinion from CMS, but they are aware of the issue.
• The earliest an official opinion could be rendered is 2014.
Possible Legal Framework
• Providers could set up an arm’s reach third-party independent foundation or charity.
• 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).
• 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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CBO Est imates of Exchange Part ic ipat ion
Source: Congressional Budget Office, “Understanding CBO’s Medicaid Coverage Projections under the Affordable Care Act”, Jessica Banthin, June 23, 2013.
A C A 2 0 1 4 & B e y o n d
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The Medica id “Donut Hole”
A C A 2 0 1 4 & B e y o n d
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A C A 2 0 1 4 & B e y o n d
Quant i fy ing the Donut Hole
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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.
• Historic Medicaid/CHIP concern; but becomes a bigger issue with ACA implementation in 2014.
– Inevitable consequence of multiple health insurance markets and subsidy systems.
• Goal: Mitigate and manage churn, but difficult to completely eliminate.
A C A 2 0 1 4 & B e y o n d
Member “Churn” is a Concern
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The Churn Problem and the Exchanges
Medicaid
Ineligible for any assistance
Exchange Subsidies
6.9M 19.5M
3.0M
The Urban Institute estimates that 29M will change eligibility status per year – equal to 31% of estimated 95.9M Medicaid and exchange subsidy recipients
Source: M. Buettgens, A. Nichols, and S. Dorn, “Churning Under the ACA and State Policy Options for Mitigation,” Urban Institute, June 2012.
A C A 2 0 1 4 & B e y o n d
