A Roadmap for States Using the Federally Facilitated Exchange

A Roadmap for States Using the Federally Facilitated Exchange September 2012 ContentsINTRODUCTION ............................................................................................................................................ 1EXCHANGE BASICS ...................................................................................................................................... 1IMPLEMENTATION AND OPERATIONS OPTIONS ................................................................................................ 2STATE ROADMAP TO FFE IMPLEMENTATION ........................................................................................... 2STATE CONSIDERATIONS AND ACTIONS .................................................................................................... 4OTHER CONSIDERATIONS ............................................................................................................................... 5FUNDING ....................................................................................................................................................... 5ABOUT COGNOSANTE .................................................................................................................................. 6 ExhibitsExhibit 1. Health Insurance Exchange Timeline........................................................................................... 1Exhibit 2. Comparison of the SBE, SPE, and FFE Options .......................................................................... 2Exhibit 3. State Roadmap to FFE Implementation ....................................................................................... 3Exhibit 4. FFE and State Business Area-Required Actions .......................................................................... 4Exhibit 5. Exchange Funding Opportunities ................................................................................................. 5 Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this white paper. ii

A Roadmap for States Using the Federally Facilitated Exchange September 2012INTRODUCTIONThe passing of the Patient Protection and Affordable Care Act (ACA) and the subsequent upholding ofthe majority of the law by the Supreme Court have resulted in significant changes to the way Americansaccess health insurance. A key feature of the ACA, and one that may have the biggest impact on statebudgets and personnel, is the requirement to have a health insurance exchange (HIX) available andfunctioning by a government-defined deadline.States have the option of implementing a state-based exchange (SBE) that fulfills the HIX requirement.Those that cannot or choose not to implement a functional SBE by the deadline may participate in theFederally Facilitated Exchange (FFE) provided by the Department of Health and Human Services (HHS).This document summarizes the actions for a state to adopt the FFE and highlights the key areas and tasksrequired to achieve successful implementation.EXCHANGE BASICSAs shown below, States must have a HIX in operation by January 1, 2014, and they must submit ablueprint by November 16, 2012. For states that do not have an approved or conditionally approved HIXby January 1, 2013, a FFE will be implemented by the Centers for Medicare & Medicaid Services (CMS).CMS considers the FFE to be an interim solution until states implement their own SBEs, which must bean easy-to-use and efficient operation that establishes consistent rules and business processes to ensure aseamless and high-quality customer experience. Exhibit 1. Health Insurance Exchange TimelineCMS and the Center for Consumer Information and Insurance Oversight (CCIIO) are currently buildingthe FFE. HIX business functions and system components included in the FFE are web portal; planmanagement; eligibility management; enrollment; financial management; consumer assistance; SmallBusiness Health Options Program (SHOP); and marketing & outreach. Business functions and systemcomponents not included in the FFE are interfaces between the federal data services hub (DSH) and state Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this white paper. 1

A Roadmap for States Using the Federally Facilitated Exchange September 2012systems, in-person consumer assistance, health plan licensing and insurance commissionerresponsibilities.Implementation and Operations OptionsShould a state not create its own SBE, there are two options for FFE implementation and operations: fullFFE implementation, or a state partnership exchange (SPE).In full implementation, CMS provides, hosts, and operates all system components and business functionsincluded in the FFE scope above. The state is responsible for all interfaces with state systems and in-person consumer assistance. In a SPE, the state may opt to operate plan management, consumerassistance or both. A side-by-side comparison of the SBE, SPE, and FFE options is shown below. Areas/Business Functions SBE SPE FFEWeb Portal State Federal FederalPlan Management State Federal or State FederalEligibility Determination State Federal and State Federal and StateEnrollment Management State Federal Federal and StateFinancial Management State Federal FederalConsumer Assistance State Federal and/or State FederalMarketing & Outreach State Federal FederalSHOP State Federal Federal Exhibit 2. Comparison of the SBE, SPE, and FFE OptionsRegardless of the exchange model selected, the Federal Data Services Hub (DSH) is at the center of alltransactions to and from the FFE and the only point to which any partnered entity can connect withfederal systems, including the FFE.STATE ROADMAP TO FFE IMPLEMENTATIONStates electing the FFE Exchange model will be required to plan, coordinate, and implement variouscomponents to support the FFE. State actions should be in coordination with CMS actions to ensure anon-time launch of a fully-functioning FFE. A high level roadmap for implementing a FFE at the statelevel is shown in the below figure Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this white paper. 2

A Roadmap for States Using the Federally Facilitated Exchange September 2012 Exhibit 3. State Roadmap to FFE ImplementationUse or disclosure of data contained on this sheet is subject to the restriction on the title page of this white paper. 3

A Roadmap for States Using the Federally Facilitated Exchange September 2012STATE CONSIDERATIONS AND ACTIONSEach FFE business area requires distinct actions by the FFE and the state, as shown in the following table. Exhibit 4. FFE and State Business Area-Required Actions Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this white paper. 4

A Roadmap for States Using the Federally Facilitated Exchange September 2012Other ConsiderationsStates must determine how to implement and operate interfaces between state systems and the FFE,including individual account transfers, Department of Insurance (DOI) (risk adjustment, planmanagement, reinsurance), and Health Insurance Portability and Accountability Act (HIPAA)transactions. States must also implement governance and protocols for data collection, coordination, andreconciliation functions. This includes coordinating eligibility determination processes and operations,coordinating and reconciling processes and data for enrollment and disenrollment from plans, andcollection of eligibility source data for support of audits.States’ data systems may need to be modified to accept, generate, and transmit HIPAA transactions. Forexample, if eligibility determinations are received by a state’s Medicaid Management InformationSystems (MMIS), the MMIS must be able to accept the HIPAA health plan enrollment transaction. If thestate continues to determine eligibility for non-MAGI medical assistance programs, the system must beable to generate and transmit a HIPAA health plan enrollment transaction to the FFE as a notice of anindividual’s health insurance coverage. The FFE will be entity reporting to the IRS on individualcoverage status and must have a record of all enrollments to avoid levying an erroneous consumerpenalty.Communication between the State and the FFE is essential to Payment error rate measurement (PERM)and payment accuracy measurement (PAM). PERM and PAM audits cover the entire path of claimpayment, from whether a client is eligible to accuracy and merit of the actual provider service payment. Ifa client is deemed eligible by the FFE, the state must record that to protect against culpability andpotential financial liability for erroneous payments.FUNDINGThe ACA provides funding to states to establish a HIX (SBE or SPE) or build interfaces to the FFE.Grant funds are available to build and test interfaces to the DSH to support certain functions of the FFE.Establishment grants will be awarded through the end of 2014. They are available for three years afteraward and can be used to sustain the first year of operation. Exchange funding opportunities are shown inthe below table. Funding Source Funding Type Eligible Start Date Funding Expiration DateEstablishment One Grant Block Grant Quarterly through One year after grant award 10/15/2014 (extension available on request, up to 5 years)Establishment Two Grant (through Block Grant Quarterly through Three years after grant awardend of start-up year) 10/15/2014 (extension available on request, up to 5 years)Medicaid Modernization APD 90% FFP 2011 12/31/2015Funding for DDI (cost-allocatedportions only)Medicaid Modernization APD 75% FFP Upon certification of Dependent on DDI implementationFunding for Operations (cost- Eligibility system by 12/31/2015allocated portions only)Regular Medicaid and SCHIP 50% FFP Anytime NoneFunding (non-Medicaid (Medicaid)/ 65%Modernization) (SCHIP)Brokers, Health Plans, Employers Fees 10/1/2013 (?) End of ExchangeState General Fund 100% State 10/1/2013 End of Exchange FundsAdvertisers Fees 10/1/2012 (?) End of Exchange Exhibit 5. Exchange Funding Opportunities Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this white paper. 5

A Roadmap for States Using the Federally Facilitated Exchange September 2012ABOUT COGNOSANTECognosante has consulted with states such as Utah, Oregon and the District of Columbia on theimplementation of their HIX programs; we understand the challenges states face and we are activelyworking with our clients to find the best possible solutions to these challenges. Cognosante currentlysupports CMS in the development of the FFE, giving us a unique understanding of FFE systems and howthey integrate with other state systems. Our expertise results from the combined knowledge of the ACA,exchanges, and the FFE and our understanding of how health care reform can impact other state programssuch as Medicaid and CHIP; and our proven ability and capacity to implement and operate consumerassistance centers to scale. Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this white paper. 6

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A Roadmap for States Using the Federally Facilitated Exchange

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A Roadmap for States Using the Federally Facilitated Exchange Document Transcript