Thursday’s Covered California Board meeting, the first since the last day of open enrollment 2013, offered a deep dive on the standardized benefit designs and the quality/equity framework that will guide contracting with insurers for the next 3-year cycle (2017-2019), and a heated discussion about the new documentation requirements that insurers are calling for to qualify as a SEP enrollment.
Executive Director Report
Covered CA Peter Lee shared observations about OE3 and the second renewal period: With 440,000 new enrollees and a decent number choosing new plans in renewal, competition and shopping tools seem to be working. Take up by diverse and subsidy-eligible populations affirms Covered CA’s more targeted approach to marketing and outreach. Even better for the risk mix and therefore cost, the younger demographic continues to grow as a share of new enrollees. In terms of market share, Blue Shield has exceeded Anthem Blue Cross as the market leader, commanding 28% of renewals (vs. 26% for Anthem) and 27% of new enrollees (vs. 24% for Anthem). The subsidy-eligible population continues to prefer silver level plans, the best value for their circumstance.
2017 Qualified Health Plans Recertification, Standardized Benefit Designs, and Quality Framework
The pressure is on to finalize the application for the 2017 QHP (Qualified Health Plan) contracts and specifications on standardized benefit design, and quality/equity requirements that will be built into contracts over 2017-19 and adjusted from year to year.
First, the good news: The Board approved the 2017 QHP application (see Model Contract), including the new benefit designs that will further standardize copays and incentivize primary care by reducing copays for primary care visits and for urgent care visits (for details see chart). For patients who do their part by paying all of their out-of-pocket costs for an ER visit, there will be no more “gotcha” bills that show up after those bills are paid. There is still a copay for ER visits, but going forward patients will have better predictability and limits on their cost exposure. With the new benefit designs, consumers hopefully will understand more precisely what they are buying and not have cost sharing be a barrier to preventive care.
On the quality/equity side, Covered CA has been moving toward innovative and groundbreaking progress on equity and disparities reduction through systematic data collection and meaningful use of quality and equity measures over time. By the specifications spelled out in Attachment 7 of the contract (worth reading), the QHPs will need to show year-by-year improvement in disparities reduction in three targeted areas and others on patient safety and hospital-acquired infections.
On all quality and equity targets there will be robust improvement opportunities available to providers. But by 2019 contracts will only include performing providers (who meet average thresholds on cost and quality) or the plans will have to provide rationale for continuing to contract with outlier providers.
Still missing from the contracting specifications: any specific requirement on the part of plans to address high-cost drugs, which distort premium pricing. For now, the plans will need to show what they are doing about the problem to help Covered CA identify best practices. For example, are they seeking an independent review of the effectiveness of a given medication?
While groups like Health Access, CPEHN, Consumers Union, and others that have been very active in these conversations are frustrated with last week’s decision to delay implementation of the quality/equity innovations, the expectation is that the board will proceed at the April Board meeting. The need to look at more measures, says Lee, is for the sake of easing the burden on quality measures and data collection. We don’t want these requirements to interfere with patients’ access to quality care, says Lee and others.
The health plans and providers are not opposed to the measures per se, but since they are tasked with the nuts and bolts of implementation, we can understand their need for more time to consider the proposed measures. Said Beth Capell for Health Access: “We wish would do more sooner, while recognizing we are not the people having to implement this.”
There are other reasons for caution or to make sure we get it right the first time on quality/equity measurement. Covered California would like to leverage its active purchaser authority to incentivize hospitals’ use of “Pay for Performance” (P4P) measures. Based on recent guidance from the National Quality Forum, advocates have been working to educate stakeholders on the need to adjust P4P and similar performance measures to reflect socio-economic status of hospitals’ patient mix. What we don’t want to happen is for hospitals that see poorer and sicker patients (and therefore more diverse patients) to stop serving these communities so they can meet performance targets.
Health Plans Asking for Barriers to Special Enrollment Period (SEP)
Covered CA reported on their work to promote the use of the SEP or off-season enrollment for qualifying events (see list of qualifying events). When people do enroll outside the official open enrollment period, the state’s exchange has relied on self-attestation that the qualifying event actually took place. More recently and out of concern that SEPs are overused by people seeking coverage only when they get sick (an assumption based on higher costs of SEP enrollees relative to OEP enrollees), the plans have asked for new requirements for paper documentation of the qualifying event. The health plans threaten higher premiums, saying the premium rates for 2017 are based on claims experience from 2015, where actuarial data is just emerging. If there are no restrictions or guardrails around SEP, says Covered CA’s Chief Actuary John Bertko, the risk mix is compromised for all enrollees and Covered CA is exposed to adverse selection and higher premium costs for all.
Arguing that such a requirement for paper documentation creates needless barriers to enrollment and noting evidence that a documentation requirement could depress SEP enrollment by as much as 10-25%, advocates point to a lack of evidence that consumers are abusing the self-attestation process in the first place. Others like Betzabel Estudillo of California Immigrant Policy Center and Doreena Wong of Asian Americans Advancing Justice emphasize the barriers that diverse or mixed immigration status applicants already face and how a new documentation requirement would exacerbate those barriers. Betsy Imholz of Consumers Union and many others pointed out that many consumers facing special event situations, whether they are moving or losing their job, are the least likely to have the papers needed for documentation. Someone who lost their fast-food job is not likely to have a paper document of that fact–how should Covered California require paper documentation that doesn’t exist?
Board member Marty Morgenstern, noted that even he has a hard time coming up with documents in 10 days! “There are no bad guys in this issue,” said Morgenstern, urging all stakeholder to work hard for the best solution.
Covered CA is recommending that the QHPs request documentation on SEPs and that Covered CA handle the eligibility determination. Over the next few weeks Covered CA is seeking input on ways to lessen the burden on consumers, including electronic alternatives to documentation, for final Board action in April. The new policy would take effect in June. Now is the time to submit comments to Covered CA—watch for talking points from Health Access and partners (or see the first sign on letter here).
The Section 1332 State Innovation Waiver Meeting
Under Section 1332 of the Affordable Care Act, states may seek a waiver from the federal government to pursue innovative approaches to achieve the primary goals of the ACA. The proposal should cover at least the same number of people with the same level of benefits, affordability, and consumer protections and cannot increase the federal deficit. For California an exploratory process kicks off this Tuesday, February 23 with a panel featuring Health Access’ Anthony Wright, UC academics, and others to begin framing the opportunity for California.
When: February 23, 2016 8:30 am to 12:30 pm
Where: Covered CA’s Tahoe Auditorium, 1601 Exposition Parkway, Sacramento (also via live broadcast)