Published in POLITICO
If state health care exchanges survive the Supreme Court challenge, the election and state tea party activists, health policy experts are worried they could still be brought down by a much more mundane problem: information technology.
Even states that are solidly committed to pursuing an exchange are facing major logistical challenges in building the computer systems that will be able to handle enrollment when exchanges open for business in 2014.
That’s largely because the system that will actually connect people to the right coverage will have to “talk” to many other systems, and they don’t use a common language. This includes a yet-to-be built federal “data hub” with tax and citizenship data, the enrollment systems of multiple private insurers selling exchange plans, and — hardest of all — state Medicaid enrollment systems, many of which are not yet fully computerized.
Even if all of the states that have taken the biggest steps to launch exchanges — less than 20 at the moment — were charging full speed ahead, there’s a lot of concern that they’ll have to switch to a “partnership” exchange model, with HHS running key functions. That’s because their IT systems could fail final tests in the months before the exchanges open in 2014. And that would mean losing some of the ability to customize the enrollment process for a state’s needs.
“People fear that the technology piece is just not going to be quite there,” said former Maine Insurance Commissioner Mila Kofman, who is now at Georgetown University’s Health Policy Institute. “The states that want the state-based exchange might not be able to be certified” by HHS to open on their own in 2014, she said.
This is a major reason that most health consultants estimate fewer than a dozen states will be running fully state-based exchanges, at least at first.
Deloitte’s Patrick Howard, who is working on exchanges in multiple states, counts only around seven states that have finalized contracts with vendors to build these IT systems. A few more are currently shopping for a contractor.
That doesn’t give the others a whole lot of time to tackle a complicated task.
“Every month matters now,” Howard said.
California provides one of the most dramatic illustrations of the challenge pro-health reform states are facing.
The Golden State was the first to authorize the creation of a state exchange after the health law passed. But it still hasn’t signed a contract with an IT vendor, even though it had set a deadline of two months ago for announcing a developer, said Micah Weinberg of the Bay Area Council, an advocate close to the exchange development process.
And the existing state of its systems for enrolling people in public insurance programs means it’s going to be a huge jump to get ready for 2014.
Weinberg illustrates the problem by explaining that if the state’s Children’s Health Insurance Program — Healthy Families — is found to be eligible for the Medicaid program, a paper file is overnighted to the other program’s enrollment office.
“That’s our IT system here in California,” Weinberg said ruefully.
States are making a major push to upgrade their Medicaid enrollment systems, thanks in part to funding provided by the stimulus bill. But a January study by the Kaiser Family Foundation found that only one state, Oklahoma, had a fully automated Medicaid enrollment system that could process applications in real time. And the state is fighting the health reform law.
While upgrading their Medicaid enrollment systems, the states are going to have to start using federal tax data to make their eligibility determinations for the first time — the same information that the exchange will use to calculate the premium subsidies for people who are buying private coverage.
The need for real-time information creates a second problem for the exchanges. They have to build a way to integrate their system with the feds’ data repository — and that hasn’t even been built yet.
HHS is overseeing the construction of what it’s calling a “data hub” that will combine tax information from HHS with the other information needed to establish that people are eligible for coverage. The technical specifications for transmitting data haven’t been released yet, and HHS officials said at a conference on Wednesday that they still hadn’t reached agreements with some of the other programs that will need to contribute information to the hub.
The data hub, said Deloitte’s Howard, is “a black box we will deal with as it comes up.”
There is also no standard format for private health insurers to give details on plan benefits and in-network providers to the exchange — key information someone is going to want to know about a plan when enrolling in an exchange, Howard said.
This is not unfamiliar territory for insurers, who are used to private insurance portals like eHealthInsurance, but common standards still need to be worked out in every state.
Of course, many of these challenges facing state exchanges are also ones that will make it hard for the federal government to build IT systems in states that don’t set up their own. That includes not only the states that try and fail, but also the ones where the administration will have to set up a federal exchange because the state is not cooperating with implementation.
But HHS has something of a head start on the process, having awarded the development contract to CGI back in December — a company that was already working on building HealthCare.gov, the informational site about the health care law with limited tools to help people find insurance.
And experts think it can move ahead faster by basically telling state Medicaid programs and insurers how they will have to connect to a federal system rather than customizing their system in every state.
HHS had hoped that states would get a head start on the IT challenge through Early Innovator grants, which initially went to six states and a multistate consortium working with the University of Massachusetts Medical School. But three of these states have since backed out of the program and are now resisting health reform implementation.
Jay Himmelstein, who is directing the New England multistate grant, is hopeful that the four projects still under way will be able to hand off solutions to states and greatly accelerate their work. But even if they offer such tools, other states will need to get serious about moving ahead fast.
“There are very tight timelines,” Himmelstein said. “They’re doable, but they’re very tight.”