More flex­i­bil­ity in ex­change regs

Providers hoped for CMS stan­dards on ex­changes

Modern Healthcare - - FRONT PAGE - Rich Daly

Fed­eral of­fi­cials widely hailed flex­i­bil­ity ex­tended to the states in the final reg­u­la­tions guid­ing the es­tab­lish­ment of in­sur­ance ex­changes un­der the health­care re­form law, but that has some providers fear­ing what states will do with that lee­way and gird­ing for 50 new bat­tles.

The final rule, is­sued last week, out­lines de­tails of the ex­changes, or in­sur­ance mar­ket­places, sched­uled to launch Jan. 1, 2014. The ex­changes will of­fer in­sur­ance-plan op­tions for in­di­vid­u­als and small busi­nesses, along with sub­stan­tial sub­si­dies to lower-in­come en­rollees.

The final fed­eral stan­dards out­lined a se­ries of min­i­mum re­quire­ments that the var­i­ous state ex­changes must in­clude. How­ever, they also left many pro­vi­sions up to states; fed­eral of­fi­cials re­peat­edly touted such flex­i­bil­ity.

“These poli­cies give states the flex­i­bil­ity they need to de­sign an ex­change that works for them,” HHS Sec­re­tary Kath­leen Se­be­lius said in a writ­ten state­ment.

But not all providers were com­fort­able with that ap­proach.

For in­stance, the Na­tional As­so­ci­a­tion of Public Hos­pi­tals and Health Sys­tems had been push­ing for fed­eral re­quire­ments on a col­lec­tion of ex­change poli­cies that will af­fect public hos­pi­tals and their pa­tients. The reg­u­la­tions al­low states to de­cide some of those mat­ters for them­selves.

“We were hop­ing that CMS could take care of some of that at the fed­eral level, but with the di­rec­tion it has taken we’re just go­ing to have to track the states and ex­change im­ple­men­ta­tion a lot closer,” said Xiaoyi Huang, as­sis­tant vice pres­i­dent for pol­icy at the NAPH.

Among the ar­eas of con­cern for the NAPH was the CMS’ re­fusal to fur­ther de­fine the term “gen­er­ally ap­pli­ca­ble pay­ment rates,” which in­sur­ance plans in the ex­changes must pay to safety net providers. The public hospi­tal group had wanted fed­eral rules to set them as the higher of Medi­care re­im­burse­ment rates or the high­est ne­go­ti­ated rates for sim­i­larly sit­u­ated providers. With­out fed­eral re­quire­ments, the

as­so­ci­a­tion wor­ried that some of their mem­ber hos­pi­tals would end up with lower re­im­burse­ment rates be­cause they lack the ne­go­ti­at­ing lever­age of large pri­vate sys­tems, which also don’t pro­vide the same de­gree of com­mu­nity sup­port ser­vices.

Public hos­pi­tals also were con­cerned that the CMS de­clined to re­quire in­sur­ance plans in the ex­changes to con­tract with all both es­sen­tial com­mu­nity providers and high-vol­ume Med­i­caid providers, and to con­duct ac­cess re­views if they don’t con­tract with all es­sen­tial com­mu­nity providers.

Blair Childs, se­nior vice pres­i­dent of public af­fairs for Premier health­care al­liance, said in a writ­ten state­ment that his or­ga­ni­za­tion op­posed HHS leav­ing states the op­tion of im­pos­ing a provider tax to pay for eval­u­a­tions of in­sur­ance plans for the ex­changes. The plans “are ex­pected to ben­e­fit from ex­changes, in­clud­ing ac­cess to mar­kets and re­duced sales and mar­ket­ing costs, and they should bear the cost of these as­sess­ments,” he wrote.

Premier, an al­liance of about 200 hos­pi­tals and health sys­tems, also was dis­ap­pointed the final rule al­lows states to con­sti­tute up to half the mem­ber­ship of their ex­change gov­ern­ing boards with in­sur­ers’ rep­re­sen­ta­tives, Childs wrote. “While ex­changes clearly need the ex­per­tise of health in­sur­ance is­suers and agents, ac­tive and en­gaged ad­vi­sory com­mit­tees should suf­fice.”

Ken­neth Raske, pres­i­dent of the Greater New York Hospi­tal As­so­ci­a­tion, hailed the state flex­i­bil­ity in­cluded in the final rule and said his group plans to ad­dress any de­tails of the ex­change that emerge as its au­tho­riz­ing leg­is­la­tion con­tin­ues to move through the state’s Leg­is­la­ture. Such a need to en­gage state leg­is­la­tors is prefer­able, he said, to try­ing to fit into a fed­eral ex­change im­posed if the state does not act.

“No mat­ter whether you live in Ok­la­homa or New York or Cal­i­for­nia, in­sur­ance mar­kets gen­er­ally, and health in­sur­ance specif­i­cally, are very, very much lo­cal prod­ucts with spe­cific rules and reg­u­la­tions,” Raske said. “Go­ing with the state ap­proach is prob­a­bly the best bet as it re­lates to ex­changes.”

The final rules will in­form state leg­is­la­tures’ de­sign of their own in­sur­ance mar­ket­places, but few in Washington ex­pect it will in­flu­ence whether states un­der­take such ac­tion. Only 13 states have passed au­tho­riz­ing leg­is­la­tion or ex­ec­u­tive au­tho­riza­tion for ex­changes, and HHS will de­cide within 10 months whether each state will re­quire a fed­eral ex­change based on its progress by then (March 5, p. 12).

David Mer­ritt, a se­nior ad­viser at Leav­itt Part­ners, said that fol­low­ing re­lease of the rules states that were im­ple­ment­ing ex­changes will con­tinue, while those that were wait­ing or re­fus­ing to act will con­tinue to do that. “Many are wait­ing for a (Supreme Court) decision, and oth­ers are wait­ing to see what the fed­eral ex­change looks like,” he said.

The New Jer­sey Leg­is­la­ture passed a bill last week that would cre­ate an ex­change. While Re­pub­li­can Gov. Chris Christie has not said whether he will sign or veto the leg­is­la­tion, he has pre­vi­ously said he would not move for­ward with an ex­change un­til the Supreme Court rules on the con­sti­tu­tion­al­ity of the law (See story, p. 10).

In Congress this week, some Democrats from states that are ad­vanc­ing ex­changes, such as Sen. Joe Manchin (D-W.VA.), have said they urged such ac­tion, while oth­ers were more pes­simistic.

“They made a po­lit­i­cal decision in Ohio that they don’t like this health­care law,” Sen. Sher­rod Brown (D-ohio) said when asked about an ex­change in his state. “I hope they will start mov­ing for­ward on it, but it’s un­clear to me.”


HHS Sec­re­tary Kath­leen Se­be­lius

told the Se­nate Ap­pro­pri­a­tions Com­mit­tee this month that of­fi­cials

are work­ing closely with state of­fi­cials to en­sure they are ready to meet the 2014 dead­line to launch

health in­sur­ance ex­changes.

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