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Exchanges need improvements


As healthcare reform enters its second year, insurers and exchange vendors complain that interoperability continues to plague the carrier-facing side of federal and state exchanges.

When President Obama announced the launch of the federal insurance marketplace in 2013, he compared the new health-insurance-shopping experience to “buying a TV on Amazon." Yet as healthcare reform enters its second year, health insurers and health insurance exchange vendors complain that data interoperability issues continue to plague the carrier-facing side of federal and state exchanges, forcing many health plans to turn to outside vendors to navigate connectivity issues and search for solutions.

“I rarely have a bad experience with Amazon,” says Stephen Goldstone, president and chief executive officer of Wyoming-based WINhealth. “If the exchange operated on Amazon’s level, I would be pretty happy.”

A year after its botched launch, HealthCare.gov, the website for the federally facilitated marketplace (FFM), continues to struggle with back-end technical problems.

“A year ago, we built procedures on the assumption the federal exchange would do certain things, which as it turned out, it didn’t do,” Goldstone says. “The exchange didn’t work for the consumer and it clearly didn’t work for the carrier. Processes we thought would be automated weren’t, and for the most part are still manual.

“Much of the federal government’s efforts since the early days of the exchange have been designed to improve the consumer-facing side of the exchange,” he adds. “If you are an individual who goes to the exchange to enroll, you have a better experience in 2014 than you did in 2013, but on the carrier-facing side of the exchange, there still are many issues.”

Related:Websites improve for second open enrollment cycle

One of the exchange’s main shortfalls is lack of a fully-automated back-end system that reconciles and updates member information and other key data. When people change their address or need to add a child to their coverage, for example, the Centers for Medicare and Medicaid Services issues a termination file and then re-enrolls them, creating additional work for the carrier.

“There is not a permanent reconciliation process between the health plans and the exchanges, so some of the regular maintenance-- updating files, updating consumer information---is still being done in large part manually,” says Clare Krusing, spokesperson for America’s Health Insurance Plans. “More of the back-end system needs to be built out and reconciliation is part of that.”

While the HealthCare.gov website is operating better this year, the second enrollment period brings a new set of challenges, with more than 8 million people renewing their policies through auto-renewal, changing plans or changing carriers.

“This is the first year of renewals and the auto-enrollment process, so we are in a bit of uncharted territory in terms of what sort of data and technology is needed moving forward, but we are gaining clarity every day into how those processes need to work,” Krusing adds.

Bruce Pomfret, vice president of NFP Health, says the inaugural year of the federal and state exchanges spotlighted a skills shortage--a lack of experts who understood how health plans collected, transferred and stored information ranging from enrollment data to financial data.

“You didn’t have a lot of people who understood how to put that together,” he says. “You had something like 17 state-based exchanges that needed to hire vendors, who needed to hire staff to create these interfaces with carriers. You had carriers that needed to hire staff to help interface with the exchanges on their side, and then you had the federal exchange needing to establish interfaces with hundreds of carriers across the country. What you ended up with were implementations that didn’t work.”

Related: Five state exchanges are making major website changes for 2015

While much knowledge has been gained in year one, data reconciliation between the exchanges and the health plans is expected to be an ongoing issue. Some experts anticipate incremental rather than wide-sweeping improvements as long as the healthcare industry continues to rely on outdated technology for claims processing and other functions. 

“The biggest challenge across the board is the pretty significant gap in the data the carrier has--either they are missing enrollments or they are missing terminations for enrollments that should have been terminated or they didn’t get updates on data that has been subsequently updated by the exchange,” Pomfret says. “Until we have a cleaner, more timely reconciliation process, you are going to have a gap between these things, and it is a multiplying gap. Reconciliation issues tend to pile up on one another.”

Next: Exchanges that work well



Pomfret says the role data reconciliation plays in an exchange’s success or failure is significant.

“Exchanges that we have seen that work well have people at the vendor level, the state level and the exchange level who understand how carriers consume data and how important it is to have timely and accurate data,” he says. “It sounds obvious, but it often isn’t.”

WINhealth turned to Softheon Inc.’s cloud-based marketplace integration platform to eliminate headaches it was experiencing with the FFM and to create a direct enrollment option. 

“We wanted to be able to offer people the opportunity to directly enroll with us and not have to go through the exchange,” Goldstone said. Part of the reason they went with Softheon, he adds, is that they were “able to act as our interface with the exchange and us. They have become our intermediary and it’s working significantly better than it would have without their resources.”

While initially some vendors priced themselves out of the reach of smaller health plans, Daniel Buchanan, business development senior consultant at Dell, believes evolving pricing strategies will enable smaller carriers to hire outside assistance.

Related:CMS extends Accenture contract for Healthcare.gov website while GAO recommends security fixes

“Vendors, if they are smart, are learning to re-price or repackage so they can reach down to those smaller, regional plans and the new co-ops that are popping up in most states, so expertise isn’t overshadowed by lack of funding,” he says. 

Softheon founder and chief executive officer Eugene Sayan suggests vendors can be the game changers that provide long-term solutions to data interoperability issues.

“Vendors need to come together and agree on a protocol where we are able to take the data and share the data with other vendors,” he says. “We need to come up with standards that everyone follows to some extent. In the absence of standards, every one is inventing their own little ways.” 

Goldstone, however, believes the “long-term fix is to reconfigure the process’’ so that carriers enroll members directly, determine a potential member’s eligibility for an advanced premium tax credit and the amount of the credit, and then feed that information to the exchange.

“The whole experience has to be rethought,” he says. “We, the carriers, should be the ones enrolling members directly and we should be feeding the information to the exchange, as opposed to having this unwieldy organization between the customer and us.”

Despite the bumpy beginning,  Pomfret is optimistic the future will be brighter than the recent past.

“Things are running,” he points out. “Nothing is outright broken now. Yes, that is a low bar, but each vendor is getting better, each carrier is getting more sophisticated. The lessons learned are being applied from a project management, technology and leadership perspective. I think you are definitely seeing a significant improvement in year two. By year three, the discussion will be around policy and all the noise about technology probably will fade into the background.”

A setback could be the Supreme Court challenge to Affordable Care Act tax subsidies. If tax credits are struck down when the court rules next summer on King v. Burwell, “there would be major disruption in the 37 states that are relying on the federal exchange,” predicts Joel Ario, managing director of Manatt Health Solutions.

“That kind of thing would be a real setback and, frankly, what we don’t need at this point because things are stabilizing,” says Ario, who served as director of the Health Insurance Exchange Office in the U.S. Department of Health & Human Services. 

“We have more people covered today, insurance rates are down and we have the lowest healthcare inflation in 50 years. Something is going very right with the system. Can the Affordable Care Act take full credit for that? No, but they can take some of the credit,” Ario says.  

Andrea Downing Peck is a freelance writer based in Bainbridge Island, Washington.

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