Update on Health Insurance Exchanges in NC
As if medical practices did not already have enough on their plates, 4th Quarter of 2013 is bringing a critical step in the implementation of the Patient Protection and Affordable Care Act (ACA). The purpose of this article is to give you some background, information, and issues surrounding Health Insurance Exchanges in order to better prepare you and your practice. After all, knowledge is power.
By October 1, 2013 Health Insurance Exchanges must be operational in every state in preparation for Open Enrollment for the 2014 plan year, which begins January 1, 2014. Exchanges should make it easier for individuals and small employers (defined as companies with 50 or fewer full-time equivalent employees) to compare plan offerings and make purchase decisions for health insurance.
North Carolina could have set up its own exchange but opted to partner with the federal government to operate the exchange within the state. According to healthcare.gov, starting in October 2013, North Carolina residents will be able to access information about all available plans through the exchange. All plans offered through the North Carolina Health Insurance Exchange will meet the ACA’s definition of a Qualified Health Plan (QHP). The plans will be offered by level of coverage for essential health benefits (EHB) to allow consumers to compare plans on an “apples to apples” basis. The plans are classified into four “metal” levels: Bronze (plan pays 60%), Silver (plan pays 70%), Gold (plan pays 80%) and Platinum (plan pays 90%).
Only three insurance carriers, Blue Cross Blue Shield, Coventry and FirstCarolinaCare Insurance Co. in Pinehurst, will participate in the individual exchange for 2014. This is a decrease from the seven carriers who currently offer individual insurance products in North Carolina. Additional carriers could join the Exchange and offer products in future years.
Healthcare.gov reports that 1,346,601, or 17%, of North Carolina’s non-elderly residents are currently uninsured. Many of these individuals may qualify for the Health Insurance Premium Tax Credit, which is meant to incentivize the purchase of health insurance. This is a potentially large volume of individuals who will be entering the health insurance marketplace or changing their plans from employer-sponsored to exchange plans.
On the other hand, there are still a lot of unknowns surrounding the Health Insurance Exchanges. Many major carriers seem to have taken a “wait and see” attitude and patients may as well. A number of surveys suggest the exchange is not ready for primetime given the complexities of such a system. The ACA’s rules and regulations, not to mention the incredible demands on interoperability, such as between the exchange and the IRS for example, pose significant challenges to implementing the system successfully. Surveys also suggest that a significant number of people know very little about the exchange or its requirements. To make this event even more challenging, the rules, policies and procedures associated with the implementation of the Health Exchange continue to be dynamic. For example, on Tuesday, July 2, 2013 the Administration postponed the mandate that required employers with at least 50 employees to offer insurance or else incur a fine.
A known risk regarding exchange plans involves the required process for handling nonpayment of insurance premiums by individuals. Federal guidelines require that insurers offering exchange plans provide a three month grace period to individuals who have not paid their premiums. Carriers must pay the claims during the first thirty days but may hold claims for the next sixty days. If the patient’s coverage is cancelled after ninety days for failure to pay the premiums, carriers are not required to pay claims for services received during the last sixty days. This creates a new liability for practices. It is very likely the payment made during the first thirty days will be recouped if the patient fails to pay the premium. Federal guidance on this point is to encourage carriers to provide notice to the practice as soon as practical. The real burden here resides at the practice level though, thus creating an ever greater need to verify patient eligibility prior to service. A reasonable approach to minimize this risk in this scenario would be to collect up-front for services rendered pending final determination of patient eligibility. Needless to say, this looks to be a very messy policy fraught with unknowns and a potential source for financial loss and bad patient relations.
Another large risk with the exchange plans is increased administrative burden related to audits. Under the ACA, there is a program to help spread risk across insurers. This risk adjustment requires insurers to collect data related to patients who are sicker and more expensive to care for. There may be penalties in contracts for practices who fail to provide specified data within a required time period. The exchange plans behave similarly to Medicare Advantage plans, which can create significant administrative burden in requesting chart and other information.
The best plan for preparing for 2014 and the impact of the Health Insurance Exchange is to arm your practice with knowledge. The federal government has recently launched a website (www.healthcare.gov) that provides specific information related to the Exchange in North Carolina for individuals and employers. Technical information regarding the Exchange and changes along the way to implementation can be obtained by signing up for updates related to the market at Marketplace.CMS.gov. More information on the types of plans is beginning to be released from the carriers themselves as well. An example is Blue Cross Blue Shield’s map listing the counties in which their exchange program is available. The map can be found at http://www.bcbsnc.com/content/plans/individuals/bluevalue/map.htm. MSOC Health strongly encourages you to visit this site, as well as Coventry’s site, to determine whether the members of your practice are listed as participating providers. If you are a participating provider with any of these plans and have not received information from the carrier, we highly recommend that you contact your provider representative. Examples of questions you should ask include:
- What are the carrier’s expectations of your office’s responsibilities for the new plans?
- What is the potential volume of newly insured patients that will be seeking care in your area?
- What is the fee schedule upon which your practice will be reimbursed for these new plans?
There are many risks for certain as we experience the most dramatic change in the healthcare arena since the introduction of Medicare in 1965. But with knowledge and proper planning, practices will weather yet another storm. MSOC Health is pleased to offer any assistance or suggestions to help you remain successful.