(June 2011) Navigating the ACA Exchange Environment: A Payer Perspective


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Community-affiliated plans have a unique opportunity to take advantage of Health Insurance Exchanges (HIXs) when they open for business in 2013, with coverage starting in 2014.

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(June 2011) Navigating the ACA Exchange Environment: A Payer Perspective

  1. 1. Navigating the ACAExchange Environment:A Customer PerspectiveJune 21, 2011Download this presentation at www.slideshare.net/dellservices
  2. 2. Topics of Discussion• Introductions• Health Insurance Exchanges (HIXs/Exchanges) in operation and in the Affordable Care Act (ACA)• Impacts on Community-Affiliated Plans and Lessons Learned• What’s happening now—and looking forward2
  3. 3. Introductions3
  4. 4. Bringing Innovation to a Changing Payer MarketWe support more than 100 insurers, and the only operating Exchange in the industry,with standard and custom solutions. • Support the creation of a sustainable insurance marketplace for individuals, employers, and employees • Help payers navigate uncertainty by identifying opportunities and risks • Support alignment of core business functions with the Exchange environment • Provide policy and technology consulting to state governments • Help commercial and Blue Cross Blue Shield customers transition to a consumer-centric model • Facilitate Web-based transactions among all constituents to strengthen relationships4
  5. 5. Dell Services Capabilities From product support to business solutions, we help our customers achieve their business outcomes. Business Consulting Infrastructure Applications Support Process Business Infrastructure Configuration Applications Business IT Cloud Support Process Managed and Services Consulting Consulting Services Services Services Services Deployment• Custom • Document • Strategy and • End User • End User • Virtual • End User • Hardware Development Management Transformation Desktop Warranty • Data Center • Data Center • Data Center• Testing • Data Capture • Organizational • Virtual Data • ProSupport Change • Enterprise • Hosting Center • Network• Applications • Knowledge- Management Architecture • Accidental Management Based and • Information • X-as-a- Damage Transaction • Process • Data Center Assurance Service• ERP and Processing Reengineering Infrastructure (Platform, IT, • Value-Added Industry • Network Mgt. S/W, Services Applications • Contact Center • Supply Chain • End-User Computing Apps, Management Software)• Business • Engineering Intelligence Services • Customer • Data Relationship Management• Modernization Management • Business Continuity/ Disaster Recovery 5
  6. 6. Denver Health & Hospital AuthorityMissionTo provide access to the highest quality of health care, whetherfor prevention or acute and chronic diseases regardless of abilityto pay.“Level One Care for All”6
  7. 7. Denver Health & Hospital Authority• Academic, community based, integrated health system, located in Denver, Colorado• Political subdivision of the State of Colorado• Since 1860, DHHA has served as Colorado’s “safety net” healthcare system and has provided care to Denver’s most vulnerable populations7
  8. 8. Denver Health Medical Plan, Inc.• Established in 1997 as a non-profit HMO, a wholly owned subsidiary of Denver Health & Hospital Authority• Created to fill a need for affordable healthcare• Product portfolio includes: Commercial, Medicare, Child Health Plan Plus and Medicaid Choice8
  9. 9. Health Insurance Exchanges in both operation and the Affordable Care Act (ACA)9
  10. 10. Changes to HealthcareWe are currently facing the greatest changes to healthcare in more than a generationand Exchanges are at the heart of those changes. New records New member New channelHealth regarding the demographics partners number ofInsurance covered livesExchangeNew market New product New rules for New budget hitmechanism designs managing for states members10
  11. 11. Initial Health Insurance Exchange Implementation Timeline 2015 2017 2013 2014 2011 2012 2010$1M planninggrants awarded; Exchanges go-liveInitial guidance for full operations;from CMS Individual and Employer mandates Innovator grants and low-income tax awarded; Level I and II credits begin build grants announced; Initial Federal subsidy for vendor RFPs out Exchange operations ends HHS to certify states Establishment of on-target for Ban on non-profit insurance Exchange large-group co-ops to compete operation; participation with commercial Exchanges go live ends plans for open enrollment Plan and Engage Design and Build Certify and Launch Operate and Sustain 11 Confidential Services
  12. 12. Goal of the Exchange Create a sustainable insurance marketplace for individuals, employers and employees • Launch a multi-channel (paper/phone/web) marketplace, with all necessary front Create and back-end infrastructure • Develop an approach that is attractive to all stakeholders and is easy to use, Sustain meets federal and state requirements and generates sufficient revenue • Certify plans as meeting Exchange coverage and access requirements Insurance • Support (and even drive) competition among plans and provide a choice toMarketplace consumers (individual and small group members) and employers • Use competition to promote choice, quality of plans and providers while reducingIndividuals costsEmployers/ • Use competition to promote choice, quality of plans and providers while reducing costsEmployees • Make it easy for employers to contribute to and support their employees’ health 12
  13. 13. What is an Exchange and Who Comes ClosestToday? PPACA Requirements for American Health Benefit Exchange (AHBE—Individual) Utah Mass Provide both an individual and a small group insurance exchange website (or portal) Certify health plans that participate in the Exchange Present plan options in a standardized way (i.e., Platinum, Gold, Silver, Bronze) Provide web resources (i.e., cost calculator) and toll-free call center support to users Administer the exemption process for individual mandates Determine eligibility and enroll applicants in Medicaid/SCHIP Determine eligibility for new tax credits and cost-sharing reductions for persons with income 100-400% FPL Facilitate advance payments by Treasury to insurers of individual premium assistance tax credits Determine if employer-sponsored insurance is “affordable,” and if individuals with access to employer-sponsored coverage are eligible to purchase insurance via the Exchange Receive and process “free choice” vouchers for employees with unaffordable employer- sponsored coverage Operate a consumer assistance (or “Navigator”) program Report user and employer data to Treasury Generate sufficient revenue to be self-sustaining by 2015 Currently meets or performs a similar function: Fully meets Mostly meets Partially meets Minimally meets Does not meet or NA13
  14. 14. States will Use Flexibility from CMS to Tailor the Exchange that Best Meets Their Needs Light Pragmatic Robust • Lighter regulatory role • More developed policy • Highly developed policy • More “free market” by infrastructure and regulatory model promoting economic • Thinking beyond • Tradition of leadership andEnvironment growth traditional (e.g., regional oversight • Satisfied with level of exchange) • Use to promote policy State competition and quality goals • May receive waiver to • Some market • Active purchaser of create a simpler vision management insurance • Primarily aggregates • Commercial, off-the-shelf • Standardized products information and low-risk solutions • Robust functionality • Limited services to plans • Remains flexible due to • Substantial support forCharacteristics and members political shifts education and outreach Exchange California & Utah? Maryland? Massachusetts 14
  15. 15. Every Exchange will Go Through Some Version of Four Primary Phases Exchange Development Maturity Model Phase 1: Plan & Phase 2: Design Phase 3: Test, Phase 4: Operate Engage & Build Certify & Launch & Sustain (2011) (2011-2013) (2012 – 2014) (2013 – 2014+) • Pass legislation • Select vendors • Obtain federal • Market Exchange • Assess capabilities • Design readiness • Serve membersCritical Activities and market architecture • Certify plans and for Exchange • Monitor/regulate • Create road map • Create standards products performance to 2014 • Develop risk • Engage consumers adjustment • Provide input • Provide input to • Make participation • Enroll and serve • Assess impact to design and decisions membersCritical Activities membership architecture • Begin marketing • Receive and for Plans • Assess market/ • Create internal • Prepare for reconcile payment characteristics of process/system operations newly insured change roadmap 15
  16. 16. Impacts on Community- Affiliated Plans and Lessons Learned16
  17. 17. Payers Should Explore Opportunities andChallenges that Range from the Operationalto the Strategic People Process • Understanding each other’s worlds • Administrative simplification • Managing stakeholders • Plan certification • New members that may be • Member enrollment significantly different from current customers Technology Strategy • New integration partners (e.g., federal • Rethink channel & distribution government) strategy • New integration points • Product portfolio • New shopping portals • Re-balance risk portfolio • Re-define business modelThis is a significant opportunity to collaborate and join with states eager to test newstrategies and reduce risk — take control now, or take the chance of losing it for good17
  18. 18. New Opportunities Are Created By Exchanges Growing Existing Markets Entering New Markets Engaging New Channels • Individual members: • New lines of business: • Self-service via the – Newly insured – Extend product Exchange (subsidized and portfolio up or down – Individuals shopping unsubsidized) the market for coverage – Shift from employer- • New Populations: – Small businesses sponsored to individual – Different member offering coverage, – Medicaid growth types (family, often for the first time – Volume invincibles) • Navigators helping – States shifting to • New geographic markets individuals and small managed care – Within the same state businesses shop • Small business: – New states • Brokers via the Exchange – Add coverage to capture tax subsidies – Identify newly defined contribution opportunities18
  19. 19. Exchanges May Provide Opportunities to Reduce Costs • Brokers Enable and encourage self-service through Exchange web portal • Employers • IndividualsMove more members to standard HIPAA • Support Exchange’s effort to seamlessly enroll transactions members Advocate for default enrollment within • Lower cost of member acquisition your products instead of churn when • No “disenrollment” costschanges in members’ life circumstances • Continue to recoup investment in medical drive eligibility category shifts managementCreate products to ease transition across • Similar benefits membership / subsidy categories • Similar networks • Opt-out for electronic communications (e.g.,Align internal processes to support new paperless EOBs) members and shifts in eligibility • Membership card updates • Eligibility inquiries from providers 19
  20. 20. Significant Investment May Be Required to Operate in the HIX Environment Each plan should carefully assess its own corporate structure inclusive of operational, financial, and regulatory environment prior to committing to an Exchange. Product Marketing & Med Mgmt / Finance / Quality / Operations Development Sales Care Delivery Contracting Reporting• Actuarial Support • New channel set • New member set • Capacity • Receiving / • HEDIS• Regulatory up up management reconciling • CAHPS submissions • New market • Sending / • ER Triage individual • NCQA (if• New product segment Receiving HIPAA development payments required for set-up (EOC, communications Transactions • Medical home • Revised / participation) Contracts, etc.) • Market outreach • Benefit / Claims integration expanded to uninsured Payment Set – provider • Existing Up contracting customer • Reinsurance education 20
  21. 21. To be Successful, Plan Leaders Must Engagea Variety of Stakeholders Plan Internal Stakeholders:Health Insurance StateExchange Government • Marketing & Sales • Community RelationsFederal InternalGovernment Stakeholders • Product Development / Actuarial • OperationsLocal ExchangeStakeholders Vendor(s) • IT • Compliance / LegalBrokers Members • Finance • Medical ManagementProviders Employers • Clinical Delivery (if appropriate)21
  22. 22. Biggest Challenges Identified at the ConnectorChurnMovement of members between eligibility categories/subsidy levelsCustomer ServiceContinuity between call centersOutreachEducating newly insured on how to use insuranceRisk Adjustment & Product DesignSustainable approved products 22
  23. 23. Lessons Learned from MassachusettsOverly Complex Siloed Customer Misunderstanding Unwillingness to Undervaluing thePlan Design Service Models the Newly Insured Change Relationship• Plans tend to have • There will be • Likely to be • Don’t expect the • Understand what lots of iterations – multiple mostly healthy, Exchange to the Exchange need to work from challenges but do not know build around you governance defined benefits under the new how to use • Need to meet model is trying to while at the same model: they insurance them halfway, achieve time trying to need to be • Education and and sometimes • Understand the innovate solved together outreach, in further challenges • Leverage both partnership, will Exchange call centers and be critical leadership/staff web portals face 23
  24. 24. What Plans Should Be Doing Now Engage Educate Prepare Evaluate24
  25. 25. What’s Happening Now—and Looking toward the Future25
  26. 26. What to Expect Over the Next Six Months Unpredictable State-specific implementation Continued agendas and progress at uncertainty hybrid solutions federal and state are emerging level Heightened Helping small levels of businesses and engagements job growth and scrutiny26
  27. 27. Planning for the “What Ifs” Helps Reduce RiskWhat if all or part of the Patient Protection and Affordable Care Act (PPACA) is blockedsometime between now and 2014? Ways the law could be What still exists if the Ways an Exchange significantly “impeded” law is impeded? can still help • Defunded by GOP • Rising healthcare costs • States: Congress • Significant uninsured/ – Provide an easy way to • Partially repealed or key underinsured population apply subsidies – Encourage innovation by provisions declared • Stagnant quality carriers unconstitutional • Badly fragmented – Provide a counterweight to • Fully repealed or entire subsidized care/insurance consolidating hospital law declared • Powerful hospital/ACO groups/ACOs unconstitutional groups going directly to • Plans: employers – Capture a potentially very • Strong political support attractive risk pool – Attract employers with for Exchanges on both defined contribution health sides at a national and plans local level – Grow share to increase leverage with providers – Manage churn with appropriate “gap” products27
  28. 28. How We Can Help?28
  29. 29. Dell ServicesBringing Innovation to a Changing Health Payer Market • Administrative application andWe support more outsourcing servicesthan 100 insurers - • More than 40 million membersand the only supportedoperating • Business process services • Implement open source technologyindividual solutions to increase efficienciesExchange in the • Aid disease managementindustry - with • Help commercial and BCBS customers transition to a consumer-centric modelstandard and • Facilitate web-based transactionscustom solutions. among all constituents to strengthen relationships29
  30. 30. Next Steps• Contact the Dell Services Payer Team with questions: – Andrew_Arends@dell.com or – LuAnn_Gohn@dell.com – Industry thought leadership: › Conference speakers (www.dell.com/speakers-bureau) › Future webinars – Insight – Strategy – Execution• Attend the National ACAP meeting – The Fall Health Insurance Exchange Meeting, October 12-13, Houston, TX30
  31. 31. Key Takeaways This is potentially the biggest change in healthcare since 1965 There are both opportunities and risks for health plans in this change The impacts of change will be felt across the health plan Key implementation decisions will have to be made before political uncertainty is resolved Plans can participate in this change or have it thrust upon them31
  32. 32. Thank YouLeAnn Donovan Karl Haught, Jr. Andy Arends(303) 602-2001 (303) 602-2004 (630) 708-2521LeAnn.Donovan@dhha.org Karl.HaughtJr@dhha.org Andrew_Arends@dell.comDownload this presentation at www.slideshare.net/dellservices