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Health Insurance Exchanges: Implications for Physicians

This article explores the implications of health insurance exchanges for physicians, including access, eligibility, enrollment, and employer options.

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Health Insurance Exchanges: Implications for Physicians

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  1. Health Insurance Exchanges:Implications for Physicians Matthew Katz, EVP/CEO Connecticut State Medical Society OSMAP Meeting Chicago, IL June 6, 2014

  2. Critical Junctures for Health Reform • Passage of the Affordable Care Act (ACA) • Patient Protection and Affordable Care Act of 2009 • Health Care and Education Reconciliation Act of 2010 • U.S. Supreme Court Decision - 2012 • Lawsuits challenging ACA’s constitutionality • Individual mandate upheld as a valid exercise of Congress’ power to tax individuals • ACA’s Medicaid expansion constitutional only if States permitted to opt-in and not forced to participate (through penalties)

  3. Expansion of Access: Health Insurance Exchanges • Centerpiece of insurance market reforms • Marketplace for individuals and small employers to shop for health insurance • Significance of the Exchanges: • Organized and transparent marketplace for the display of “qualified health plan” options in an internet-based, standardized format • “Apples to apples” comparison of health plan options • Quick and easy eligibility determinations and enrollment through a single application • Portable coverage (not dependent on job or employment status) • Consumers into a large risk pool

  4. Expansion of Access: Health Insurance Exchanges • Functions of the Exchange • Eligibility • Single application for all determinations • Can be conducted online, by mail or telephone • Enrollment • Selected health plan • Medicaid • Plan Management • Certify health plans • Review rates and benefit information (through state Insurance Depts.) • Consumer Assistance • Navigators, in-person assisters, outreach, call centers, websites

  5. Expansion of Access: Health Insurance Exchanges • Exchanges are the only means of accessing federal subsidies • Individuals and families with incomes between 100% - 400% of FPL are eligible for federal subsidies • Premium Tax Credits • Incomes between 100% - 400% of FPL • Cost Sharing Subsidies • Incomes between 100% - 250% of FPL • Must purchase a silver plan to get a subsidy**

  6. Expansion of Access: Health Insurance Exchanges • Employer Options • Small Business Health Options Program (SHOP) • Employers eligible to use Exchanges • ACA allows employers with up to 100 FTEs to participate on Exchange • States may limit employer size to 50 FTEs from 2014 to 2015 • States may allow large employers in Exchange in 2017 • Employer must have principal business address in SHOP service area • Employers can enroll on Exchanges on a monthly basis throughout the year, but can still set annual enrollment period for employees • State may merge individual Exchange and SHOP or keep separate

  7. Exchange Models • State-Based Exchange (16 states and DC) • States perform and can control all Exchange functions • However, states rely on federal data hub for premium tax credit and cost-sharing determinations • Federal-State Partnership Exchange (6 states) • State operates health plan management and/or consumer assistance functions • Federal government performs all other functions including reinsurance program, Medicaid and other eligibility • Federally-Facilitated Exchange (28 states – default model) • Run by the government, but will coordinate with the state relative to licensure, solvency and other state market conduct standards

  8. The CT Marketplace: Access Health CT • Organized marketplace for health plans to compete and offer services efficiently in the small group and individual markets • Not exclusive: markets will exist outside exchange • All enrollees in/outside exchange in a single risk pool • Provides level playing field for health plans to comply with benefit requirements and consumer protections • Facilitates competition based on price, quality and value • State law prohibits physicians, health insurance representatives from serving on the Exchange board

  9. Access Health CT Offerings • Individual Plan Offerings • ConnectiCare • HealthyCT (CO-OP) sponsored by CSMS • Anthem • Small Business Exchange • United Healthcare • HealthyCT (CO-OP) sponsored by CSMS • Anthem

  10. Access Health CTKey Areas • Enabling legislation- Public Act 11-53 • Governance • Board of Directors • Planning Grant (September 2010) • CEO and staff • Policies and Bylaws • Four Advisory Committees • Consumer Experience and Outreach • Health Plan Benefits and Qualifications • SHOP (Small Business Health Options Program) • Brokers, Agents and Navigators

  11. Access Health CT: Initial Projections • 10% of state residents were uninsured (344,000 individuals) • 585,000 Medicaid enrollees • Projected Medicaid increase of 75k enrollees • Expected 120k in state exchange in 1st year • Majority newly eligible for subsidies • Roughly 10-20% will be small businesses

  12. Access Health CT Snapshot • As of March 31, 2014 • Signed up more than 80,000 state residents for private health insurance (67% of expected total) with another 7,000 signed up but are no longer covered (didn’t pay, job offered insurance, etc). • Almost 150,000 signed up for Medicaid (2x expected) • About 50% were 45 years of age or older • Close to 30% of enrollees were in the18-to-34 age bracket • Few sign ups through the SHOP

  13. All Payer Claims Database • CT law created the APCD in 2012 • 1 non-governmental/agency appointment • Governor Malloy appointed Matthew Katz • CT law changed in 2013 • Allowed more appointments: health insurers, patient rights representatives (unlimited) • One Aetna representative appointed by Governor • APCD placed under Access Health CT • Proposed policies and procedures relating to certain aspects of data collection, maintenance and access • Proposal to “merge” exchange data into the APCD

  14. All Payer Claims Database • For physician identifiers: SSN vs. NPI? • Access to data is critical – policies and procedures with access criteria are “forthcoming” • Sub-groups formed: develop security protocol, access protocol, RFPs for off-site data storage • Policy and Procedures Subcommittee: “denied claims”

  15. Access Health CT: Initial Confusion • Contracts • Reimbursement • Narrowed/Tiered Networks, Network Adequacy • Grace Period • Cost Sharing • State vs. Federal Laws: Prompt Pay, etc.

  16. Access Health CT Today • 79,000+ CT residents enrolled in private plans, one of the highest sign-up rates in the country • Maryland will use CT blueprint to revise its website; other “exchange in box” services on offer • New smartphone and tablet apps for consumers to compare plans, shop

  17. Exchange Contract Example

  18. Exchange Contract Example

  19. Exchange Contract Example

  20. Exchange Contract Example

  21. Exchange Plans: Cost-Sharing • Exchange plans may have significant cost-sharing requirements far in excess of deductibles and co-pays in traditional plans.

  22. Exchange Plans:Cost-Sharing • Exchange participating physicians likely to see high-deductible patients without the benefit of HRA/HSA structure • Significant patient financial responsibility = significant risk shifting to physicians • Specialists at higher risk vs. primary care physicians

  23. Exchange Plans:Physician Reimbursement • Access Health CT is a marketplace: not responsible for setting or negotiating physician reimbursements • Exchange contracts have typically been based on percentage of Medicare; words like “approximately” or “estimated” • Potential for significantly lower reimbursement than off-exchange plans

  24. Exchange Plans: Reporting Obligations • Exchange plans are subject to reporting mandates on both state and federal levels • Physicians need to understand their reporting obligations • Will physicians have additional reporting obligations? • Are there time frames on these obligations? • Will they be burdensome to a small practice?

  25. Exchange Plans:Network Adequacy • Exchange plan out-of-network coverage is almost illusory • At the 70% silver level, there is a $6,000 OON individual deductible and a $12,000 OON family deductible • Creates a situation where OON network referrals are financially not practical • Physicians should review/examine network adequacy before committing to a Exchange plan • Without an adequate network, physicians may find lack of availability for patient referrals • Negotiations with Exchange plans when no in-network referral or resource is available

  26. Federal Grace Period: Physician Risk • Biggest issue is the extent to which financial risk shifts to providers under the federal grace period • Under PPACA § 1412(c)(2)(B)(iv)(II), Exchange plan participants that have paid at least one month’s premium and received advance premium tax credits are permitted to have an unpaid premium balance for three months before they may be terminated for delinquency • Most states provide only a one-month grace period

  27. Federal Grace Period:Physician Risk • Days 1-30: Treated as if the enrollee has paid premiums. Physicians will be paid by Exchange plans • Days 31-90: Claims submitted by providers may be pended and ultimately denied by the Exchange plan upon enrollee termination. • If the balance owed by the enrollee is paid, any held claims must be paid to the provider • Final rule: Exchange plans “may still decide to play claims for services rendered [in days 31-90] in accordance with [plan] policy or State laws, but the option to pend claims exists. If the individual settles all outstanding premium payments by the end of the grace period, then the pended claims would be paid as appropriate. If not, claims for the second and third months could be denied”

  28. Federal Grace Period:Physician Risk • Why is the risk of non-payment shifted to physicians during the last two months of the grace period? • Under PPACA, health plan issuers must offer a plan off-exchange which is essentially identical to the plan being offered on the exchange at the same premium rate • Most states provide a one-month grace period for non-payment of premiums • HHS: if Exchange plans were required to assume the risk of payment in days 31-90, this could produce markedly different premiums between plans on and off the Exchange, which would not allow compliance with the PPACA mandate • Mandating that the insurer retain the risk for only one month “align[s] the grace period claims payment standards” between plans on the exchange and off the exchange

  29. Federal Grace Period:Physician Risk • HHS also uses enrollee tax liability as a justification for shifting risk to providers in days 31-90 • The effect of structure of the federal grace period is that if an enrollee fails to pay 3 months of claims, the enrollee is terminated retroactive to day 31- essentially getting one month of coverage for free • Enrollees can incur a tax liability for any advance payment of premium tax credits. If Exchange plans were required to bear the risk for the entire 3 month grace period, coverage would not be retroactively terminated, but instead would end after 3 months of non-payment • Under this structure, an enrollee would be potentially liability for three months of advance payments of the premium tax credit, would could be substantial • HHS believes that a retroactive termination date is appropriate to mitigate enrollee financial exposure as an enrollee’s financial exposure would be limited to the first month’s advance payment of the premium tax credit

  30. Grace Period:Federal Response • HHS “understands” that pended claims increase uncertainty for providers and “increase the burden of uncompensated care.” • Exchange plans must now notify providers who submit claims for services rendered during days 31-90 of the grace period that any such claims will be pended and potentially not reimbursed • Timing and substance of the notification is unclear • Unclear how this benefits providers since it appears this notification will only come after services are provided at the time of claims submission

  31. Grace Period: Federal Response • Notice to Providers • State exchanges are on their own; providers will be harmed by the lack of clear guidance from the state exchanges • Federally-facilitated exchanges are required to “notify all potentially affected providers as soon as it is practicable when an enrollee enters the grace period…” • This notice should include: • Purpose of the Notice • Notice-unique identification umber • Name of the particular plan and affiliated issuer • Names of all the individuals affected by the policy and possibly under the care of this provider • A grace period explanation with applicable dates, including whether the enrollee is in the 2nd or 3rd month of the grace period, consequences of grace period exhaustion for the enrollee and the provider, and further options for the provider • Customer service telephone number specifically for the provider

  32. Federal Grace Period:Gaming the System • HHS recognizes the potential for gaming during the grace period • Savvy consumers potentially could pay 9 months of premiums, stop paying the premium payment for 3 months and then enroll in a new Exchange plan, starting the process all over again • Suggestions were made during the comment period regarding reduction of the potential for gaming during the grace period

  33. Federal Grace Period:Gaming the System HHS responded: “We did not adopt the recommendations… [We] will continue to explore options for incentivizing appropriate use of the grace period, either through future rulemaking or in the context of the general insurance market”

  34. Federal Grace Period:Prompt Payment Laws • Federal grace period allows insurers to pend claims for up to two month • State prompt pay laws generally require insurers to pay clean claims within a 15-30 day time frame (CT: 20 days electronic) • Does the federal grace period preempt state prompt pay laws? • Recoupment / Offset to comply with prompt pay

  35. Exchange Plans: Will Physicians Have a Choice? • In many states, physicians will not have a choice to opt out of Exchange plans • In those states with all products clauses, physicians may be forced to participate in Exchange product offerings • In CT, we succeeded in getting legislation passed two years ago that bans “future products” clauses, but have not been successful passing legislation that bans all products clauses. • Unclear if Exchange products are “future products” or extensions of existing products and subject to all products enforcement

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