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Full Steam Ahead: In Wake of Supreme Court Decision, HHS Issues Funding Opportunities, Implementation Guidance



July 5th, 2012

While all of the attention of the public and of the media has been focused on the Supreme Court’s June 28 decision upholding the constitutionality of the Affordable Care Act (ACA) and on examining the nuances and consequences of that decision, the federal government has steadily moved ahead with implementation of the ACA.  With the impediment that the litigation had potentially posed to implementation now cleared away, the federal and state governments must proceed expeditiously to meet the January 1, 2014 deadline by which the exchanges, insurance reforms, premium tax credits, and Medicaid expansions (for the states that choose to pursue them) must be in place.

On June 29, the day following the Supreme Court’s decision, the Department of Health and Human Services (HHS)  announced the availability of ten new scheduled opportunities, lasting though October 15, 2014, for states to apply for funding to establish state-based exchanges, state partnership exchanges, or state capacity to cooperate with federally facilitated exchanges.   HHS effectively announced that, now that the Supreme Court had upheld the law, it was time for the states to move forward, and it was prepared to offer the states the funds needed to proceed.  HHS has already distributed $850 million to 34 states and the District of Columbia for exchange establishment grants, and this announcement offers additional funding.  The ACA itself appropriates funds for establishing state exchanges in the amount determined by HHS to be necessary, so no further appropriations are required to make this money available.

HHS simultaneously published guidance on the use of the grants.  The guidance clarifies that the grants can be used for start-up year expenses to allow consumer outreach, testing, and necessary improvements including, for example, enhancing systems, developing protocols, raising consumer awareness, training staff, and strengthening the overall effectiveness of operations. Start-up funds are available until: 1) the end of the exchange’s start-up year, 2) the time an exchange becomes self-sufficient, or 3) §1311(a) grant funds have been expended, whichever comes first.  Partnership exchanges may receive funding for start-up year expenses, as well as for costs associated with transition to and establishment of a state-based exchange. States participating in the federally facilitated exchanges may also receive funding to support a transition to a partnership or state-based exchange.  All funds must be awarded by December 31, 2014.  Level one grants must be drawn down within one year and level two grants within three years.  HHS can extend deadlines for spending funds to a maximum of five years.

Although HHS stands ready to operate federally facilitated exchanges where necessary, it clearly wants the states to operate exchanges or cooperate with a federally facilitated exchange where possible. HHS is trying, therefore, to maximize the incentives for states to operate exchanges if they can be ready by 2014, but also to encourage states that cannot do so to cooperate with the federally facilitated exchange and to transition as quickly as possible to a federally facilitated exchange.

As implementation proceeds, HHS is increasingly releasing technical guidance on its Paperwork Reduction Act website.  On July 2, 2012, HHS published notices under the Paperwork Reduction Act of its intention to collect data on four ACA-related topics, and requested public comment on these data collection efforts.  Data collections covered by this notice include:

The employer and employee notices essentially set out the application form that will be used by the exchanges, either in written or electronic form.

The notices build on rules and guidance that has already been issued on each of these topics, and have little new information in them.  The qualified health plan notice states what has already become clear—that HHS is working with the National Association of Insurance Commissioners to use the association’s System for Electronic Rate and Form Filing (which states already use for collecting data for health plan regulation) to collect information for exchange plan management functions.

The employee form is a single page and collects only the most basic information necessary to sign employees up for a SHOP health plan.  One box that must be checked is whether or not the employee uses tobacco.  One largely unnoticed ACA provision provides that an employee who checks this box “yes” may have to pay half again as much for health insurance than the employee in the next cubicle who checks the box “no.”  As tobacco is disproportionately used in the United States by people with lower incomes, this factor may make health insurance unaffordable for many employees of small businesses.

The employer notice is also short and straightforward. The form allows the employer to specify a tier of coverage (such as gold or silver) and a benchmark plan, as well as a percentage of premium that the employer will contribute towards individual or family coverage for the benchmark plan (and for standalone dental coverage).  Interestingly, the form does not allow the employer to specify a flat-dollar defined contribution, an option that many employers have asked for, but which would leave older employees with disproportionately higher costs than younger employers.

Finally, the exchange application data elements provide the greatest detail we have yet seen on the information that will be needed by exchange applicants, both those applying for premium tax credits and those simply enrolling in a qualified health plan.  The amount of information needed is quite daunting.

Finally, to catch up on old business, on June 18, the HHS, issued a “Request for Domains, Instruments, and Measures for Development of a Standardized Instrument for Use in Public Reporting of Enrollee Satisfaction with their Qualified Health Plan and Exchange.” One of the most important functions of the health insurance exchanges under the ACA is to provide health insurance consumers with information that will allow them to intelligently shop for health insurance coverage.  The information provided through the exchanges will not only facilitate better understanding of insurance coverage options, but will also promote competition among insurers based on quality and price rather than on the basis of risk avoidance.

A key datum that will be of interest to plan shoppers will be information on enrollee satisfaction with qualified health plans in the exchange.  Just as internet travel and shopping sites offer useful comparative information on the experience that consumers have had with hotels or appliances, the exchanges will provide information as to how pleased (or displeased) consumers have been with their health plans.

The request seeks information as to the domains or broad functional areas on which plan satisfaction should be rated (such as access, communication, care coordination, and customer service).  It also seeks publicly-available plan satisfaction instruments and measures.  HHS further proposes to collect information on enrollee satisfaction with the health care system and with consumer interaction with the exchanges.  HHS proposes to make plan-specific quality ratings available at the exchange internet portals by 2016 for open enrollment for the 2017 coverage year.  HHS is interested in instruments that can measure quality from the consumer’s perspective—and in particular from consumers who have received care—and that can track changes over time.  HHS intends to integrate the survey to be developed into the Consumer Assessment of Healthcare Providers and Systems (CAHPS®) system of the Agency for Healthcare Research and Quality (AHRQ).  The survey will be available to users free of charge.

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2 Trackbacks for “Full Steam Ahead: In Wake of Supreme Court Decision, HHS Issues Funding Opportunities, Implementation Guidance”

  1. Passion for Subro » Full Steam Ahead: In Wake of Supreme Court Decision, HHS Issues Funding Opportunities, Implementation Guidance
    July 10th, 2012 at 7:39 am
  2. Full Steam Ahead: In Wake of Supreme Court Decision, HHS Issues Funding Opportunities, Implementation Guidance – Health Affairs Blog | Health Care Policy | Scoop.it
    July 5th, 2012 at 1:56 pm

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