WORKING FOR YOU: Health Reform Heats Up

James Noonan

More than three years have passed since the Affordable Care Act (ACA) was signed into law, setting into motion some of the most dynamic and volatile years the nation’s healthcare industry has ever seen.

Since its inception, the ACA has been a subject of controversy, inspiring hotly contested debates across the entire nation. For some, this dramatic overhaul of the country’s healthcare system represents our national leaders finally making good on the long-overdue promise of “healthcare for all.” Others claim that the law is a clear overreach of federal authority that threatens to overburden an already fragile economy.

Although the law remains controversial, the United States Supreme Court has ruled that the law is constitutional, and active steps are being taken to move forward at the federal and state level. The vast majority of activity is yet to come. With many of the provisions set to take effect next January, state officials across the nation are scrambling to make sure they’re ready to implement the law’s sweeping changes.

The road has already been somewhat rocky. Throughout the implementation process, the U.S. Department of Health and Human Services has been narrowly meeting its own deadlines, oftentimes leaving states waiting for federal guidance that could dramatically alter their own implementation plans. With several major deadlines coming in the next few months, many observers expect this problem to only get worse.

Adding to the headache for the federal government is the mixed support that the ACA has received from the states. To date, only 17 states and the District of Columbia have elected to develop their own state-run “health insurance exchange” (also called “health benefit exchange”), an online marketplace where consumers can purchase subsidized coverage. An additional seven states will form state-federal partnerships to operate their marketplaces, while the remaining 26 states have declined to participate, meaning the federal government will be responsible for operating exchanges in those areas.

The next major milestone toward full implementation of the ACA is set to take place on Oct. 1, when the health insurance exchanges are set to begin their pre-enrollment. In the first years following these marketplaces going live, more than 32 million currently uninsured Americans are expected to gain coverage, either through an exchange plan or the ACA’s massive expansion of the Medicaid program. Some analysts expect as many as 5 million of these newly insured patients to come from California.

On Jan. 1, 2014--three months after pre-enrollment begins--the exchanges are set to go live, meaning that millions of Americans will, for the first time, be able to purchase coverage using the federal subsidies promised in the ACA.

In order to navigate this massive undertaking, states will need to decide which plans will be offered through their exchanges and construct the actual online marketplaces through which consumers will purchase coverage. They will also need to implement major public outreach campaigns to ensure that these citizens--many of whom have never had the benefit of “open enrollment” or a similar purchasing period--understand how and where they can sign up for coverage under the reform law.

These tasks are daunting on their own, but with a deadline looming only months away, skeptics could be forgiven for questioning whether completing them is even possible.

Despite the uncertainty swirling around the ACA’s implementation, California looks to be on track to meet the coming deadlines. In the days following the ACA’s passage, California was the first state to establish a health benefit exchange (Utah and Massachusetts were operating their own versions of an exchange before the ACA was signed into law) and has been working toward implementation ever since. That exchange, named Covered California, has already launched its online consumer marketplace, www.coveredca.com, and is one of 25 states that have gained conditional approval from the federal government to operate its own insurance marketplace.

Unfortunately several recent decisions by the exchange board have placed California’s physician community on its heels. The California Medical Association (CMA) has been an active participant in stakeholder hearings and is working to ensure that the interests of physicians and their patients are taken into consideration as the exchange prepares to open for business.

Several issues of concern arose when the board was working to finalize the benefit standards that interested payors will be required to meet in order to have their products considered for the QHP designation. One major concern for physicians is how the exchange plans to deal with monitoring and ensuring network adequacy among QHPs.

Throughout the benefit design conversation, exchange staff continued to favor the existing method of network monitoring, which calls for the Department of Managed Health Care (DMHC) and Department of Insurance (DOI) to be responsible for ensuring that plans offered to consumers have enough participating providers. In other words, the status quo. Several stakeholders, including CMA, have noted that those two entities are currently unable to ensure adequate networks among existing plans and would likely be overwhelmed by the added task of monitoring additional exchange products. While CMA asked that the exchange take an active role in monitoring networks beginning in 2014, the DMHC/DOI method remained in the final benefit standards adopted by Covered California’s board of directors, meaning it could become the norm once the state’s marketplace goes live.

CMA also voiced concern over the exchange’s handling of the “grace period” provision included in the ACA. Under current California law, patients who are delinquent on their premiums are allowed a full 90 days to settle up before their policy is terminated for nonpayment. However, under the ACA’s grace period provisions, exchange plans will be allowed to suspend payment for services rendered if an enrollee is more than one month delinquent. If the patient fails to settle up within the three-month grace period, the plan can then terminate coverage for nonpayment and deny all pending claims for services. In this scenario, physicians could potentially be on the hook for 60 days worth of services with no avenue for recourse.

CMA has repeatedly asked Covered California’s board to reconcile the state and federal policies, but to date an adequate fix has not been presented.

Given the exchange’s accelerated timeline, as well as the exchange board’s tendency to revisit issues that were previously thought to be decided, it remains possible that both of these matters, along with others that have caused concern to physicians, could see some sort of resolution before 2014.

To be sure, the next few months will be some of the most important and tumultuous times the medical community has faced in recent memory, but as a CMA member you have the comfort of knowing that your interests are being advocated for in front of all the key players driving the nation’s reform efforts.

For more information on the implementation of health reform in California, subscribe to CMA Reform Essentials. This newsletter, available to both members and nonmembers, covers the activities of the state’s health benefit exchange board and legislation significant to California’s ongoing reform efforts. Subscribe today at www.cmanet.org/newsletters.

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Mr. Noonan is a staff writer for the California Medical Association.