Board delays seeking bids for health-hub technology

A state board has delayed soliciting bids from companies to provide the technology for a health insurance exchange for individual consumers, in part because of questions about the computerized system the state uses to determine eligibility for Medicaid.

Meanwhile, U.S. Health and Human Services Secretary Sylvia Burwell said in a letter to Gov. Asa Hutchinson on Monday that she has given conditional approval to his request to establish state-based insurance exchanges for individual consumers and small-business employees.

"Conditional approval reflects the progress the Arkansas Health Insurance Marketplace (AHIM) has made and an expectation that AHIM will be ready to provide a broad choice of affordable, quality coverage as a [state-based marketplace] for small businesses in 2016 and for individual consumers in 2017," Burwell wrote.

Established under the 2010 Patient Protection and Affordable Care Act, health insurance exchanges allow consumers and small-business owners to shop for coverage.

Consumers can also use the exchanges to apply for federal income tax credit subsidies to help pay their premiums.

Cheryl Smith Gardner, the marketplace's executive director, told the organization's board Monday that the board's consultant recommended postponing the technology company solicitation, originally scheduled to be released May 22, until the state Department of Human Services' new Medicaid Eligibility and Enrollment Framework is assessed.

The marketplace, a nonprofit organization created by the Arkansas Legislature in 2013, had planned to use the system, which has been under construction since 2012, to determine consumers' eligibility for the tax credits.

But in a May 21 letter to Gardner, Richard Albertoni, a consultant with the Boston-based Public Consulting Group, told Gardner the board would be taking on "undue risk in committing to a procurement approach that depends on [information technology] components not validated as functional."

"We are also not suggesting the assessment will necessarily find a lack of functionality within the EEF," Albertoni wrote. "Not validating EEF functionality in advance of releasing the procurement is, however, a leap of faith that could undermine the success of the individual marketplace design, development and implementation in fundamental ways.

"It could also waste millions of dollars of public funds."

In an email to board members a week later, Gardner said she agreed with the recommendation.

"Furthermore, given the time it would likely take to initiate and complete such an assessment, we recommend that the Board of Directors begin considering other options, including the possibility of a transfer solution (transferring base code from another working state exchange) or even delaying launch for the individual exchange," Gardner wrote.

A review of the eligibility system by Gartner Inc. of Stamford, Conn., under a $400,000 contract with the state Department of Information Systems, is expected to be complete in about three months.

In the meantime, Albertoni said his firm will gather information on the feasibility of using another state's exchange technology, including software used to verify eligibility for tax credits.

Compared with building the exchange technology from scratch, using another state's technology could be quicker and cheaper.

Gardner noted that Maryland revamped its glitch-plagued exchange last year using software from Connecticut. Oregon, meanwhile, is replacing its Medicaid eligibility system using software from Kentucky.

Last week, Gardner, Albertoni, marketplace Director of Operations John Norman, marketplace board member Mike Castleberry and Hutchinson policy adviser Carlton Saffa traveled to Kentucky to meet with officials from that state's exchange.

Jill Midkiff, a spokesman for the Kentucky Cabinet for Health and Family Services, said in an email Monday that the Kentucky exchange cost about $100 million and took one year to build.

Transferring the Connecticut technology to Maryland cost $40 million to $50 million and took seven months, Andrew Ratner, a spokesman for the Maryland exchange, said.

Deloitte Consulting, where Gardner worked before joining Arkansas' marketplace, led the construction of the Connecticut and Kentucky exchanges and the transfer of the Connecticut technology to Maryland.

Ratner said the Maryland exchange "worked very well," during the open enrollment period that started in November. Enrollment in that state's exchange more than doubled during the period from 66,000 to 125,000, he said.

About 107,000 people have enrolled through Kentucky's exchange, Midkiff said.

"Our system has worked pretty seamlessly," she said.

In Arkansas, about 68,000 people who did not qualify for Medicaid were enrolled in coverage through the federal exchange as of June 1.

Created by the state Legislature in 2013, the Arkansas marketplace board is using money from a $99.9 million federal grant to set up the exchanges for individuals and small businesses that would replace exchanges set up for the state by the federal government.

Seventeen states have state-based exchanges, although three of those states use the federal enrollment website, healthcare.gov. In addition, two states operate state-based exchanges for small businesses but have federally operated exchanges for individual consumers.

Hutchinson on April 16 submitted a letter of intent to establish a state-based exchange in Arkansas while noting that the Legislature "may revisit this subject."

Under Act 398, passed by the Legislature this year, the Legislature must give final approval to a state-based exchange if the U.S. Supreme Court rules that Affordable Care Act does not allow tax credit subsidies in states with federal exchanges. A ruling in that issue is expected this month.

Burwell also granted conditional approval Monday for state-based exchanges in Delaware and Pennsylvania.

Also Monday, the Arkansas marketplace board adopted a committee's recommendation to adopt Arkansas Blue Cross and Blue Shield's Health Advantage Gold Bluechoice Open Access Point of Service plan as the "benchmark" plan that will be used to set the standard for what other plans must cover starting in 2017.

Because the plan does not cover in vitro fertilization, its selection as the benchmark means that individual and small group plans offered by health maintenance organizations will continue to be exempt from a 1987 law that requires other types of plans to cover the procedure.

The current benchmark plan is also a Health Advantage plan that does not cover in vitro fertilization.

The marketplace board also voted to extend its contract with the Public Consulting Group from Oct. 1 through March 31 at a cost of $2.5 million.

In addition to helping with the exchange implementation projects, the extended contract calls for the firm to continue with regulatory consulting work it has been performing for the Arkansas Insurance Department and to help establish programs for outreach workers and agents and brokers.

Metro on 06/16/2015

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