Advisor role in exchanges causes clash | LifeHealthPro

Advisor role in exchanges causes clash | LifeHealthPro.


PPACA: Feds Say Their Exchanges Will Love Agents


PPACA: Feds Say Their Exchanges Will Love Agents

By Allison Bell

May 16, 2012

The Center for Consumer Information and Insurance Oversight (CCIIO) says "federal facilitated exchanges" (FFEs) will work about as closely with agents and brokers as the states will let them.

CCIIO officials talk about the relationship between the FFEs and agents in a new batch of exchange guidance.

CCIIO, an arm of the U.S. Department of Health and Human Services (HHS), also has released a set of guidance aimed at states that are setting up their own exchanges.

Provisions in the Patient Protection and Affordable Care Act of 2010 (PPACA) encourage states to set up "health insurance exchanges," or Web-based insurance supermarkets, that individuals and small businesses can use to buy health coverage.

PPACA opponents are fighting the act in Congress as well as in the courts. If the act takes effect as written and works as drafters expect, a state could choose between setting up an exchange, participating in a multi-state exchange consortium, or letting the federal government provide exchange services, or FFE services, for its residents.

Agents and brokers have been wondering just how much state and federal agencies will let them participate in the exchange system, and how likely they will be able to generate significant commission or fee revenue by working with the exchanges.

"HHS expects that licensed agents and brokers will continue to assist consumers in accessing health insurance, and will work with agents and brokers to promote enrollment through the exchange," officials say in the FFE guidance. "To the extent permitted by a state, an FFE will permit agents and brokers to enroll individuals in a [qualified health plan (QHP)] ‘through an exchange’ if the agent or broker ensures that an individual completes the eligibility verification and enrollment application using the exchange Internet site or the agent or broker’s site that meets certain conditions; the exchange transmits the enrollment information to the QHP issuer; and the agent or broker meets other applicable requirements (an agreement, training, and registration)."

HHS will provide licensed agents and brokers with a portal to the FFE Web site if those producers meet HHS standards, officials say.

Producers can use the portal to help individuals apply for eligibility for enrollment in a QHP and for insurance affordability programs, and if applicable, select and enroll in a QHP through an FFE, officials say.

"To the extent permitted by a state," HHS wants to work with Web-based brokers that are helping consumers chose health plans online, officials say.

HHS intends to use an application programming interface (API) to help Web brokers help individuals enroll in exchange health plans through an FFE, officials say.

Federal officials have noted that exchange runners could take two different approaches to managing exchange coverage options: Letting any qualified, willing insurer sell coverage through an exchange, or operate as an "active purchaser" and use a bidding process to try to bargain for lower rates.

"At least in the first year, we anticipate having an open market model," Steve Larsen, director of the CCIIO, said today during a press conference held to unveil the guidance documents. "Then we’ll look at the potential for having other options."

The Supreme Court is now considering the constitutionality of PPACA and could throw out part or all of the act.

"We believe the law is going to be upheld," Larsen said when he was asked how he expects the Supreme Court’s ruling to affect exchange program implementation.

Larsen said CCIIO is still developing exchange program cost estimates.

CCIIO officials leave room for the possibility that some states that choose to run their own exchanges may want to shut out agents.

In the guidance aimed at builders of state-based exchanges, officials note in a sample exchange builder application that how a state-based exchange works with producers is up to the state and the exchange managers.

"If the state permits activities by agents and brokers," officials say in an application question, the exchange should "clearly defined the role of agents and brokers including evidence of licensure, training, and compliance" with the relevant federal regulations.


Study: States should limit number of plans in exchanges

Study: States should limit number of plans in exchanges

By Sam Baker – 05/08/12 01:45 PM ET

States should use their new insurance exchanges to narrow down the number of plans consumers can choose from, according to an analysis published in the journal Health Affairs.

The article says states should follow Massachusetts’s example as they create their exchanges. A hands-on exchange with the power to set standards on top of the federal healthcare law will help prevent consumers from being “overwhelmed” by the process of buying insurance, the authors wrote.

The lead author of the Health Affairs piece is Rosemarie Day, a former deputy director of Massachusetts’s exchange. The state established its own exchange as part of then-Gov. Mitt Romney’s 2006 healthcare law, which formed the basis for President Obama’s 2010 reforms.

Day said consumers in Massachusetts preferred choosing from a handful of carefully vetted, clearly described healthcare plans. She said there is less evidence for the model used in Utah, where any plan that meets certain minimum standards can participate in the exchange.

States have looked to the dueling examples of Massachusetts and Utah — the only two states with exchanges that predate the Affordable Care Act — as they try to decide how best to structure their new marketplaces.

Conservatives favor the Utah model, while consumer advocates say exchanges should be “active purchasers” that have the power to negotiate directly with insurers.

Massachusetts’s experience shows that consumers prefer an active purchaser model, even though it could limit their choices, Day wrote.

“Findings from consumer research emphasized the value of limiting insurance plan choices on the exchange,” her analysis states. “Specifically, early focus groups showed that consumers wanted four to six carrier options at ‘low, medium, and high’ benefit levels.”

Consumers said they were anxious about the complicated process of choosing an insurance policy, and reported that they felt “overwhelmed” by the marketplace outside of a structured exchange, according to surveys the Massachusetts exchange conducted.

“Consumers valued having a range of options to choose from but also wanted the ability to obtain detailed information and were suspicious of apparently hidden information,” Day wrote, with co-author Pamela Nadash, a professor at the University of Massachusetts, Boston.

Health insurers need to stop being wimps, study finds

Health insurers need to stop being wimps, study finds

By Sarah Kliff, Updated: Tuesday, May 8, 11:20 AM

Health insurers don’t have a great reputation. Some even think they’re evil. Others say they’re heartless. But the real problem, according to a new paper in the journal Health Affairs, might be that when insurers sit across the negotiating table from hospitals and other providers, they turn into wimps..

The study, lead by the Urban Institute’s Bob Berenson, looked at health cost trends in a 12 large cities, interviewing hospital and health plan leaders in each area. Everywhere they looked, Berenson and his colleagues saw consolidation. Small physician practices were joining large physician practices, and large physician practices being bought up by hospitals. And this is giving them an edge over insurers.

A large hospital can make itself a “must-have” for a health insurer’s network and demand higher reimbursements, while an insurer might decide it can live without the smaller hospital down the street.

For their part, health insurance plans aren’t putting much downward pressure on those prices. In discussing interviews with insurers and hospital administrators, Berenson describes insurers as seemingly “resigned” to the fact that hospitals will demand higher payments for their services.

“According to both plan and provider representatives we interviewed,” the researchers write, “health plans have not recently been aggressive in negotiations with powerful providers….Terms such as truce and detente were used to describe the current state of relations between health plans and powerful hospitals. As a respondent from a must-have hospital said, Blue Cross Blue Shield is ‘such a big player and we are such a big player—we have to come to terms.’”

Why aren’t health insurers more aggressive negotiators? For one, there’s the risk of losing a must-have hospital that won’t contract with a health plan that expects to pay less for hospital services. “There is a dynamic in the market that makes it impossible for a private payer to change anything,” one interviewee tells Berenson. “Employers would not support plans in showdowns against hospital systems.”

When hospitals increase rates, the fallout for the health plan is not necessarily negative. Much of the increase can get passed on to insurance subscribers as a hike in premiums. Employers could potentially ditch an insurance plan over premium spikes, but if no insurer is bargaining rates down, there are few alternatives.

The Affordable Care Act could help push prices down by requiring additional review for any premium increases over 10 percent. The rule could give health plan an incentive to demand lower prices from hospitals, if only to dodge additional regulatory scrutiny.

Berenson is skeptical that the law’s provision will be enough to drive down costs. He makes the case for more government intervention in rate-setting with a system like Maryland’s, where the state decides how much hospitals can charge. In Massachusetts, the state’s payment reform law could also move the state in that direction.

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Catania defends health care for illegal immigrants as Gray signals opposition

Catania defends health care for illegal immigrants as Gray signals opposition

May 05, 2012 — 7:43 PM, Alan Blinder, Examiner Staff Writer

A D.C. councilman’s plan to allocate an extra $20 million to health care for illegal immigrants — a move that defied Mayor Vincent Gray’s 2013 budget proposal — has drawn sharp criticism from the mayor’s office and set the stage for what could become a pitched battle between the city’s legislative and executive branches.

"We are seriously worried that the [at-large Councilman David] Catania plan takes critical money from one program and shuffles it to another program," Gray spokesman Pedro Ribeiro told The Washington Examiner. "He hasn’t found any new money. He’s just creating holes in other places."

In an internal memorandum obtained by The Examiner, city officials said Catania’s plan "selectively grabs ‘savings’ from line items in the Department of Health Care Finance’s budget."

But Catania said that wasn’t true.

"We have enough resources to provide decent health care to everyone who lives here," Catania said. "I believe very strongly that we ought not to treat immigrants differently than other residents of our city."

On Thursday, the council’s health committee, which Catania chairs, announced it had found enough money to provide hospital care to participants in the DC Healthcare Alliance, a city health insurance offering that mostly caters to illegal immigrants who aren’t eligible to participate in federal programs.

The panel said it balanced the program’s new budget by, in part, controlling personnel costs and correcting estimates for enrollment.

Confronted with another budget shortfall, Gray had proposed slashing the program’s funding and transferring more of the costs of caring for illegal immigrants to the federal government. But that plan, which Gray unveiled in March, drew quick criticism from Catania, along with a vow to restore the dollars.

Even though the council came under harsh criticism last week for failing to approve a plan to pay District workers for furlough days they were forced to take in 2011, one union leader said the decision to move forward with the health care funding didn’t bother him.

"I’m never going to pit employees and their concerns against other legitimate concerns," said Geo Johnson, the executive director of the American Federation of State, County and Municipal Employees’ affiliate in the District. "I don’t advocate that at all."

Sale of D.C. health-care firm in works

Sale of D.C. health-care firm in works

By Nikita Stewart and Mike DeBonis, Washington Post, Monday, May 7, 9:13 PM

D.C. Chartered Health Plan is weighing offers from buyers in an effort to keep $350 million in District government business that officials have said it could lose if the company remains in the hands of owner Jeffrey E. Thompson.

Chartered’s efforts to reorganize with such a sale could be finalized as early as this week, said people familiar with the matter who were not authorized to speak publicly about the negotiations. The transaction would separate the managed-care firm from Thompson, who recently resigned as board chairman after a March raid on his home and offices in a federal probe into alleged campaign-finance violations.

The company’s contract to manage the health care of low-income city residents expires in May 2013, and bids for a new contract must be in by July 31, said Wayne Turnage, director of the District’s Department of Health Care Finance. Should Thompson pursue a sale, the transaction would also have to be approved by city insurance regulators, a process that would take at least a month.

D.C. Council member Yvette M. Alexander (D-Ward 7) said she was impressed by a potential new ownership scenario that would make Chartered a subsidiary of Philadelphia-based AmeriHealth Mercy, which touts itself on its Web site as “the leading group of Medicaid managed care plans and related businesses in the United States.”

Alexander said Maynard G. McAlpin, Chartered’s chief executive, could be the new owner of Chartered. The Washington Post previously confirmed with Chartered that McAlpin was moving to take over as the new owner.

Karen Dale, a spokeswoman for Chartered, said it “would be premature, at this time, to discuss any potential transaction” involving the company.

Michelle Davidson, AmeriHealth Mercy’s communications director, declined to confirm any negotiations. “While AmeriHealth Mercy Family of Companies always monitors the market and regularly evaluates opportunities to prudently expand our business, we do not comment on rumors or speculation,” she said. “We cannot comment further at this time.”

Chartered is still looking at other firms, said one of the people with knowledge of a potential sale.

Thompson will have to move quickly to seal a deal before the bidding deadline. The D.C. Department of Insurance, Securities and Banking must review any sale to determine “whether the acquiring entity has the financial wherewithal and expertise” to operate as a health insurer, said agency spokeswoman Michelle Phipps-Evans.

That process, she said, can happen in as little as 30 days, “but typically there is additional information required . . . and the process takes longer.”

Alexander said she met with McAlpin and Anne Morrissey, AmeriHealth’s executive vice president and chief operating officer, about two weeks ago and they unveiled the potential partnership.

Morrissey is a District native who received her nursing degree from Washington Hospital Center School of Nursing.

Chartered has been a major employer of District residents, and Morrissey emphasized that “it was important to also keep the operation local,” said Alexander, who oversees insurance issues as chairman of the Committee on Public Services and Consumer Affairs.

“She grew up in Southeast. She went to school in the area. She is local,” Alexander added. “She is familiar with this area. [AmeriHealth Mercy] is in a lot of different areas of Medicaid.”

A bidder for the new contract, among the city’s largest, would have to be able to manage the health care of Chartered’s 110,000 members. The city has aimed to have several strong companies under contract competing to serve residents enrolled in the Medicaid and D.C. Healthcare Alliance plans, but Chartered has developed a near monopoly. Now, with Thompson’s legal troubles and the firm’s recent operating losses, Chartered’s hold on the D.C. contract — its sole source of business — is threatened. Turnage told a D.C. Council committee last month that it was unlikely Chartered would keep the contract if Thompson remained in charge.

Council member David A. Catania (I-At Large), chairman of the Health Committee, said AmeriHealth Mercy “has a stellar reputation, from what I know.” But he said he has purposely not met with any potential buyers for Chartered, saying he did not want to be seen as interfering in the impending contract solicitation.

Catania, who previously acknowledged that it would be difficult for Chartered to keep its city contract with Thompson as owner, said a sale could represent a fresh start for the company.

“If the company’s owned by a reputable health insurance company that can actually build a network of high-quality physicians and actually manage the care of our residents, that’s all that’s of concern to me,” he said, adding, “I want to get away from the notion there’s anything personal.”

D.C. Council member Catania comes up with $20M for health coverage for illegal immigrants

D.C. Council member Catania comes up with $20M for health coverage for illegal immigrants
By Tim Craig, May 3, 2012, Washington Post

D.C. Council member David A. Catania has found an additional $20 million in the budget to continue offering free health insurance to 19,000 undocumented immigrants, reversing a proposal by Mayor Vincent C. Gray (D) that could have restricted them from receiving emergency care.

Catania (I-At Large), chairman of the council’s Health Committee, has made full funding of the Alliance Insurance program a chief priority as the council prepares for final budget deliberations.

But the council would be restoring the health insurance program at the same time it is scaling back other government services, including millions in services for the poor, potentially sparking fresh debate about whether city benefits for undocumented immigrants are too generous.

When the Health Committee convened on the budget Thursday, Catania announced that he and his staff had found $20.5 million in savings by eliminating some vacant positions, recalculating Medicaid enrollment and transferring some funds between Health Department units.

The five-member Health Committee unanimously approved Catania’s plan to transfer the money to immigrant health care. The full council is expected to accept the agreement when it votes on the budget later this month.

“The mayor’s proposal would have treated immigrants differently,” Catania said in an interview. “I believe, for us in this city, it was critically important we reject that.”

Gray had proposed scaling back the Alliance program to balance his 2013 spending plan by shifting some of the burden for immigrant care onto hospitals and federal programs for uncompensated care.

Created in 2001 after D.C. General Hospital closed, the Alliance Insurance program provides coverage to residents who earn too much to qualify for Medicaid but not enough to be able to afford private insurance.

But following the 2010 passage of President Obama’s health-care legislation, which boosted Medicaid eligibility, the city was able to transfer thousands of residents into the federal program.

Now, about 99 percent of residents covered by locally funded insurance are undocumented immigrants who are not eligible for federal benefits.

Catania said preserving the program this year was a crucial and symbolic step in the nationwide battle over immigration and health care.

“It’s big America versus small America,” Catania said. “I gravitate toward the notion of big America. Big America is one who welcomes people who want to work.”

If the program is cut, Catania said, undocumented immigrants would not be covered for specialty or emergency care at many area hospitals. But Gray had argued the patients would still receive care through funds hospitals establish to provide services to the uninsured.

A Gray spokesman said the administration is reviewing Catania’s proposal.

Catania’s decision comes as the council has been struggling over whether the city can afford to repay its employees a combined $22 million for furlough days they were forced to take last year. By fully funding the Alliance program, public employee unions are likely to put renewed pressure on the council to come up with the money.

For Catania, however, cutting Alliance would be a setback to his long-held goal of offering universal health insurance in the District.

In 2010, the city estimated that only 6.2 percent of District residents were uninsured, less than half the national average and lagging behind only Massachusetts in total percentage of uninsured residents.

The District was only able to achieve those rates by extending coverage to undocumented immigrants, Catania said.

“This is a rich city, and we have the resources,” said Catania. “We ought to be a leader, and not a follower, and showing the rest of the country this is America.”