Forum members can use this list of questions to begin their preparations for the 2014 launch of the state-based health insurance exchanges.

HFMA recently developed a list of key questions designed to help HFMA members prepare their organizations for the exchanges. The list was developed with guidance from HFMA's Healthcare Reform Advisory Committee (HRAC) and Local Information NetworKs (LINKs).

As part of the Feb. 23 Forum's virtual networking event on the health insurance exchanges, we asked the speakers and attendees to review and comment on the list of key questions that HFMA developed. Below is the amended list. We added comments made during the Forum's event, as well as additional questions suggested in a recent Forum's article by speaker Jon Kingsdale, PhD, managing director, Wakely Consulting, Inc., Boston.

Near-Term Profitability Questions

  • Will my state be running the exchange? (If not, then you need to find out about the federal exchange that will be offered in states without an exchange.)
  • Will your state's exchange be an active purchaser (i.e., selecting plans based on additional cost and quality criteria) or passive purchaser (i.e., certifying any plan that meets minimum criteria)?
    • So far, only four states-Massachusetts, Oregon, California, and Connecticut-have chosen an active model. Some states may start out as passive purchasers and move into a more active model.
  • Will the exchange pursue a reform agenda (for example, encouraging payment reform along the lines of bundled payment or global budgets, or encouraging ACO development)? Or is the exchange going to be more of a "yellow pages" for existing health plans?
  • How will states seek to integrate their existing Medicaid programs and the new exchanges? How will they manage the transition between state-funded safety net programs, such as Medicaid, and private plans on the exchange? Will the state be favoring commercial health plans that offer both Medicaid managed care organizations and commercial products to address the possible churn between Medicaid and the exchange?
  • Does your organization have the capabilities necessary to manage value-based reimbursement?
  • How are your outcomes (from a quality perspective) compared to other hospitals?
  • Will exchange selectivity force payers to put additional pressure on rates?
  • How are your costs (to payers) in comparison to other area hospitals?
  • Is your market over-bedded?

Long-Term Strategy Questions

  • How do you expect the addition of potentially sicker patients into the insurance pool to impact insurers' network development and care management strategies in your market?
  • How do you expect employers to react?
  • What percentage of your insured low-income patient population currently receives coverage from an employer?
  • How can you work with employers to make employer-sponsored insurance sustainable for all employees?
  • How price sensitive will consumers in the exchange be?
    • In Massachusetts, price has become a distinguishing criteria among the plans on the exchange.
  • How competitive is your state's/region's insurance market?
  • Will the exchange drive further consolidation?
    • "Massachusetts has seen a tremendous amount of activity in the private market between health plans and provider groups, which are inventing limited or tiered network products and moving into capitated and global arrangements," said Kingsdale.
  • How many of the payers will compete in the exchange?
  • What health plans are established in our area? What is our relationship with those health plans?
  • Will there be new entrants (specifically health plans) into the market? How will those new entrants affect us?
    • In Massachusetts, multi-state CeltiCare Health Plan was actively recruited by the state's exchange in 2009 as a new competitor and is one of few new health plans in Massachusetts in a couple of decades
  • Do we want to establish partnerships with plans that offer both Medicaid MCOs and commercial products to respond to the potential churn between the two systems?
  • Will the exchange result in more restricted provider networks?
    • "If the [market] situation is right, then you could see a 180-degree turn to much more efficient, tighter relationships with a limited number of providers and health plans participating," said Kingsdale.
  • Are there opportunities for the health system to offer coverage through the exchange?
    • In Massachusetts, Boston Medical Center created a not-for-profit managed care plan called BMC HealthNet Plan. Partners Healthcare took over Neighborhood Health Plan, and Steward Health Care Systems partnered with Tufts Health Plan Health.
  • If you already offer an existing insurance product, is there an opportunity for new offerings that could provide continuous coverage regardless of an individual's income?
  • Are there any near substitutes for what we do?
  • What are our strengths as an organization? What are our weaknesses?
  • Who are our competitors?
  • How will our competitors participate in the exchange and how will that affect us?
  • Is there a logical partnership that would capitalize on our strengths and address our weaknesses? For example, could we partner with a payer around a select network that is effectively marketed to individuals so we can attract more individuals to our delivery system?
  • How will a change in the volume of services provided impact profitability, staffing, and capital needs?
  • How will payer mix changes impact profitability and capital planning?
  • How can you prepare for potential rate compression? If the market becomes highly managed care and utilization goes down, how should you react?
    • You need to look at what would your cost structure need to look like if your rates of payment got closer to a public payer," said Silveria. "In Massachusetts, folks are realizing that it has to go from episodic and treat the illness to I need to get [my costs] closer to the premium and take risk to be able to be competitive."

Revenue Cycle, Price Transparency, and Patient Access

  • How do you expect your revenue cycle needs to adapt to the exchange?
  • What revenue cycle processes can you put into place to manage "payer churn?" (Providers will face this challenge as the newly insured continually transition between payer classes)
  • How will your organization provide the level of price transparency necessary to help individuals make purchasing decisions? Can the organization provide accurate estimates of patient responsibility?
    • "I think the level of price transparency will have to improve," said Richard Silveria, senior vice president and CFO, Boston Medical Center. "It's not just being able to give your gross charge, it's the whole cluster of things involving the provider payment process-to see if the patient is eligible, then looking at benefit contracts, and then looking at provider contracts in terms of rates and coming up with an expected payment rate."
  • How do you educate patients about the availability of subsidies through the exchange?
  • Will the exchange have a mechanism to facilitate Medicaid enrollment?
    • From the provider's perspective, it comes down to real-time automated enrollment-for both Medicaid/subsidized programs and for commercial plans sold on the exchange. The federal government is providing states with funding to build IT systems for the exchanges, including Medicaid eligibility enrollment programs.
  • How does this alter the role/responsibilities of your existing financial counselors?
    • At Boston Medical Center, patient access and financial counseling were the revenue cycle areas most impacted by the launch of the Massachusetts' exchange. "We had to beef up our staffing and the education level of our financial counselors," said Silveria.
  • Will the exchange have a mechanism to facilitate Medicaid enrollment?
    • The federal government is providing capital to states through 2014 to build all the IT systems for the exchanges, including Medicaid eligibility systems.

Access related material from the Forum's virtual networking event:  

The on-demand recording of the Forum's virtual networking event, "Preparing for the Health Insurance Exchanges"

Slides from the event

Key Takeaways: Preparing for the Health Insurance Exchanges

Publication Date: Thursday, March 08, 2012