Connector Reports Progress with hCentive, Awards 2015 Conditional Seal of Approval, and Approves Budget
Thursday’s Health Connector Board meeting was jam-packed with important agenda items, including:
- Health Insurance Exchange (HIX) Project Update;
- Conditional 2015 Seal of Approval;
- Health Connector Fiscal Year 2014 and 2015 Administrative Budgets; and
- Dell Work Orders.
It's clear that the Connector staff is pleased with the progress being made towards "standing up" (their phrase) the website and eligibilty system for the fall open enrollment. New health reform czar Maydad Cohen has confidently mastered the complex details of the ongoing work. Still, there are real risks, and they continue to ruthlessly prioritize only critical tasks. We were particularly pleased to hear that the system will include a single entry point and a common application for all subsidized health insurance programs. This will reduce confusion among people who generally do not know which program they may be eligible for in advance of applying.
Materials from the meeting are posted on the Connector's site. Our detailed report is just a click away.
HIX Project Update
As we reported in earlier posts (here and here), the Health Connector is working on a ‘dual-track’ strategy to build a new website and underlying eligibility and enrollment system. One track is utilizing and customizing “off the shelf” software from hCentive. The other track is focusing on linking up with the Federally Facilitated Marketplace (FFM, or healthcare.gov), and is required by CMS as a contingency plan should hCentive not be ready to go live in November. Not to be overlooked, the eligibility system revamps also include MassHealth’s implementation of a new eligibility system that is capable of making program determinations using new income methodology required under the Affordable Care Act (ACA). Both hCentive and the FFM would need to utilize the new Medicaid system.
The hCentive system was first installed for testing on June 30th. Maydad Cohen, the Special Assistant to the Governor for Project Delivery, reported that the hCentive system successfully passed its first test with the Centers for Medicare and Medicaid Services (CMS). As such, CMS gave Massachusetts permission to continue on the ‘dual track’ strategy – continue to develop hCentive and prepare the Connector to hook up with the FFM. Thus far, the Connector has focused on common work that can be used for both hCentive and the FFM. After the success of the first hCentive release and the needs of each project diverging, Cohen stated that the state will be managing the FFM project budget more tightly.
The second release of hCentive – expected for July 30th – is on schedule. This version will include the ability to make determinations and show appropriate plans for ConnectorCare, the state wrap program, and assess MassHealth eligibility. The Health Connector and CMS established early August as the decision point to move to a single track.
An important gain for consumers has been made ahead of schedule – a single “front door” to apply for coverage for residents seeking unsubsidized or subsidized coverage through the Health Connector and for those applying for MassHealth. Initially, the Connector and MassHealth thought consumers would have to choose between two “front doors” to apply for coverage – one for Health Connector coverage and one for MassHealth coverage.
MassHealth is also making significant headway with the MassHealth Eligibility Platform (MEP), the tool that will be used to make Modified Adjusted Gross Income (MAGI)-based MassHealth eligibility determinations. MEP is based in the HIX/IES system developed by the previous vendor, CGI. Importantly, hCentive (and the FFM) and MEP need to be able to communicate with each other. Particularly with a single front door, hCentive needs the ability to make account transfers to MEP and MEP needs to communicate back to hCentive to let it know what its program eligibility decision was. From there, it is envisioned that hCentive will be the application system of record and will handle case management.
The FFM track is also making significant progress. In the event that Massachusetts needs to use the FFM for Fall 2014 open enrollment, the Health Connector would remain a State-Based Marketplace (SBM) with the continued authority to oversee health plan certification, risk adjustment, outreach, and other functions.
The Health Connector received approval from CMS to use Dell to connect with the FFM to continue to perform health plan enrollment and billing functions, as it does today with the Health Connector. However, implementing the state wrap with the FFM would be exceedingly difficult. The major challenge with using the FFM would be implementing the state wrap program. States are not able to make any changes to the FFM itself, so Massachusetts would not be able to load the correct premiums and cost-sharing for applicants at or below 300% FPL who are eligible for the state wrap program. Ensuring proper enrollment in wrap plans would rely heavily on outreach and education, and create massive confusion for consumers.
The federal government has approved $192 million in funding for the dual track HIX/IES project, including the $17.5 million approved in June to pay for work Optum did between February and May to stabilize the Connector website. Last month, the state finalized a transition agreement with former vendor CGI, who will receive $52 million of their $89 million dollar contract with Massachusetts.
Enrollment in temporary MassHealth coverage is up to 237,000; as of June 30th the state has spent $138 million in claims for this program, gross of any federal reimbursement. Temporary MassHealth coverage is only part of a much larger pie of state spending on subsidized health coverage, which totals $13.5 billion. MassHealth is within its budget projections for FY2014.
2015 Seal of Approval
Next, the Connector Board voted to approve conditional Seal of Approval (SoA, the Connector’s plan certification process) to 11 Qualified Health Plans (QHP) and Qualified Dental Plans (QDP). All plans given the conditional SoA will be considered for the final SoA in September, after the Division of Insurance (DOI) completes its rate review process. According to Connector staff, the primary goal of the 2015 SoA is to maintain the 2014 SoA requirements in order to “support access to affordable, comprehensive coverage and provide continuity and stability for the Health Connector’s members.”
Current QHP enrollment is fairly even between the Gold and Silver tiers, with Platinum a close third; the vast majority of enrollees choose standardized plans. Neighborhood Health Plan has the highest non-group enrollment within the Connector. As of June 29th, over 3,900 Massachusetts residents signed up for non-group QDPs through the Health Connector, two-thirds of whom chose a standardized high level plan.
To meet 2015 Health Connector SoA requirements, health insurance carriers:
- Must offer at least 1 plan on the broadest commercial network for each standardized plan design (2 Platinum, 3 Gold, 1 Silver, 1 Bronze)
- Have the option to propose up to 7 non-standardized plans; issuers with a certain level of enrollment in tiered network products outside the Connector must propose tiered network plans within the Connector
- Propose a Catastrophic plan, but may request to withdraw if the Health Connector receives at least 2 other Catastrophic plans per service area
- Propose a “wrap-compatible” Silver plan for the state wrap (ConnectorCare) program that complies with the Health Connector’s network adequacy requirements for wrap plans
Dental carriers must offer standardized plans (pediatric only, high, low) and have the option to propose non-standardized plans. As a note, the federal government has decreased the annual maximum out of pocket (MOOP) amount for pediatric dental plans to $350 per child and $700 for two or more children. All existing dental carriers submitted the same products, except for adjustments to account for the new MOOP and network expansions (Altus Dental).
All 10 existing QHP carriers offering coverage through the Health Connector reapplied for 2015 SoA and gained conditional approval. The Connector also awarded conditional SoA to UnitedHealthcare, a new entrant to the Health Connector market. United has participated in the Massachusetts market for years but had previously been rejected by the Connector for not meeting standardization requirements. United met all the SoA requirements for 2015.
The major changes to the 2015 QHP offerings include 3 new proposed non-standardized plans, 2 new provider networks, and a new carrier – United Healthcare. In all, there will be 121 plans (104 standardized, including catastrophic, and 17 non-standardized) available for individuals and families and 116 plans (94 standardized, 22 non-standardized) available for small businesses. An important note: not all these plans are available in every service area, so the choices will be narrowed down according to where someone lives.
The base hCentive software has some helpful sorting and filtering tools to search for and compare plans. A slider tool allows users to adjust premiums, deductibles, and annual out-of-pocket maximums, and narrow options by carrier or metallic tier. People will have the ability to compare 2-3 plan choices at a time. However, unlike previously, the hCentive software that will be used for the next open enrollment period will not have the integrated provider search tool; the Connector hopes to build this in later. The Connector is looking to implement additional decision support tools in the future. The Connector is also looking for ways to separate the dental plan shopping experience from the health plan shopping experience so that individuals and families can purchase dental plans online without having to purchase a QHP (which is currently how the hCentive product works).
The Connector Board will vote on the final 2015 Seal of Approval at their September board meeting.
FY2014 and FY2015 Administrative Budget
Implementation of the ACA has had a substantial impact on the Connector’s Fiscal Year (FY) 2014 and 2015 budgets. Federal grant funding has been a key source of revenue for the Health Connector since FY13 and will phase out in FY15.
Even though implementation of the new eligibility and enrollment system did not go as expected, overall Health Connector spending in FY14 was only $4.6 million higher than original budget estimates ($117 million versus $112 million). This difference is largely attributable to servicing members in the extended Commonwealth Care program. As the state continued to contribute administrative fees for Commonwealth Care, the Health Connector is able to break even for FY14. ACA transition costs were about the same as projected in aggregate, but spending in certain areas vary from the original projection.
As with FY14, FY15 will continue to be an ACA transition year to establish the Health Connector as a fully ACA-compliant marketplace. The Connector will face a number of budget challenges in FY15, including:
- Dual track implementation requires significant resources
- Maintenance of strong back-end business operations to support the evolving IT system
- Transition of Commonwealth Care and other members to ACA-compliant coverage
- Heavy consumer assistance activities are incorporated into the Connector’s planning
To deal with the FY15 challenges, the Connector plans to:
- Leverage remaining federal grant funds in FY15 (some new funding may be available for outreach);
- Reinstate a carrier administrative fee (which they suspended in 2014) of 2.5-3% of premium
- Utilize available state funding; and
- Spend about $10 million from its reserves.
The total proposed Connector FY15 budget is $97.5 million. The Connector Board voted to approve the FY15 budget.
Dell Work Orders
The Board also approved three new work orders for their business operations and customer service vendor Dell, related to the HIX project:
- Workaround to accept enrollment files from carriers
- Integration with hCentive and FFM
- Performance of enrollment and billing functions
The next Connector Board meeting is scheduled for Thursday, August 14th at 9:00am at 1 Ashburton Place, 21st floor.