Health Reform Heats Up May 2, 2013 General ACA, Affordable Care Act, CMA, Covered California, Grace Period, Health Exchange, Health Reform, Medicaid, MediCal 0 By James Noonan, CMA Staff Writer More than three years have passed since the Affordable Care Act (ACA) was into law, setting into motion some of the most dynamic and volatile years the nation’s health care industry has ever seen. Since its inception, the law has been a subject of controversy, inspiring hotly contested debates in Washington, D.C., Sacramento and across the entire nation. For some, this dramatic overhaul of the nation’s health care system represents our national leaders finally making good on the long-overdue promise of “health care 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. Despite being signed into law more than three years ago, the vast majority of activity has yet to come. With many of the provisions set to take effect on January 1, 2014, 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 a somewhat rocky one. Throughout the implementation process, the U.S. Department of Health and Human Services has been narrowly meeting its own deadlines, often times 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 fact that the ACA has received mixed support from the states, which has complicated implementation efforts nationwide. As of early February, only 19 states had elected to develop their own state-run “exchange,” an online marketplace where consumers can purchase subsidized coverage. An additional five states will form state-federal partnerships to operate their marketplaces, while the remaining states have declined to participate, meaning the federal government will be responsible for operating exchanges in those areas. Despite these problems, the march toward reform continues on. The Next Major Milestone The next major milestone toward full implementation is set to take place on October 1, 2013, when state 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 to come from California. Three months after the pre-enrollment begins, January 1, 2014, 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, construct the actual online marketplaces through which consumers will purchase coverage and 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. The task is daunting on its own, but with a deadline looming only months out, skeptics would be forgiven for questioning whether such a task is even possible. California Leads the Way 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, recently 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. There is, however, still much work to be done at the state level. Unlike most other states, California opted to adopt an “active purchaser” model when building its new exchange, meaning Covered California’s Board of Directors will be responsible for selecting which insurance providers will be allowed to offer products on the exchanges. The selected products, known as qualified health plans (QHPs), will be required to meet a set of benefit standards finalized by the Covered California board late last year. The QHPs will be selected through a competitive bidding process set to begin in the coming months, and it’s anticipated that somewhere between three to five QHPs will be selected for each one of California’s 19 geographical rating regions. While the selection process is still far from over, it looks as though the Covered California board will not be short on options when it comes time to award the QHP designation. In October, more than 30 distinct insurance providers issued a “notice of intent to bid” to the board, and most of the state’s major insurance providers have since gone public with their intent to participate in California’s exchange. The fact that insurance companies appear more than willing to play ball with the exchange, and that Covered California was established as an independent government entity operating outside the control of the Legislature and governor, means that the exchange’s Board of Directors has a considerable amount of power when it comes to shaping California’s post reform heath care landscape. Protecting Physician Interests 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 of 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 of 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 in August, 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. Action Under the Dome With all of the moving pieces present between the federal government and California’s exchange board, it’s sometimes easy to forget that the state Legislature is also playing a large role in ACA implementation, so large, in fact, that Gov. Jerry Brown saw fit to call for a special session dedicated to health care reform in California. A total of six bills (three identical proposals being heard in both houses of the Legislature) were introduced during the special session, seeking to address individual market reforms (ABX1-1 and SBX1-1), Medi-Cal expansion (ABX1-2 and SBX1-3) and a proposal to establish a “bridge plan” (ABX1-2 and SBX1-3) that would allow for a seamless transition between Medi-Cal and exchange plans for those individuals whose income may fluctuate past the income thresholds called for in the ACA. Special sessions usually are reserved for a dire situation in need of immediate legislative action, which makes it somewhat surprising that members of the Legislature allowed the spring recess – their “soft deadline” for special session legislation – to come and go without any major action on these bills. As of early April, the individual market reform and Medi-Cal expansion bills had cleared their houses of origin and were set to be heard in committees within the second house, while the bridge plan proposal had yet to be heard on the floor of either house. There’s also a considerable amount of activity related to health reform taking place outside of the special session, specifically regarding scope of practice expansions as a way of addressing the access to care issues that will inevitably take place when millions of currently uninsured Californians gain coverage beginning in 2014. Three bills, all authored by Sen. Ed Hernandez (D-West Covina), seek to expand the respective scope of practice for pharmacists, optometrists and nurse practitioners, while a fourth, authored by Sen. Fran Pavley (D-Agoura Hills) would call for a similar expansion for physicians assistants. The ACA had two major goals: First, to expand access to health coverage to all, and second, to ensure efficient, high quality care. Those who are now invoking the ACA as the sole justification for allowing non-physicians to diagnose and treat California patients and perform complex medical procedures are attempting to achieve the first goal by undermining the second. Allowing non-physicians to practice beyond their training can only lead to inferior outcomes, higher costs and greater fragmentation of care. CMA will be closely following and fighting these scope bills, working to ensure that California meets the ACA's objectives without eroding quality or jeopardizing patient safety. 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. 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