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January 24, 2013

Performance Indicators for Medicaid and CHIP Business Functions

CMCS Informational Bulletin: Cindy Mann, Director, Center for Medicaid & CHIP Services

The Affordable Care expands access to health insurance coverage through improvements to Medicaid and CHIP and the establishment of Affordable Insurance Exchanges (“Exchanges.”) It assures coordination between Medicaid, CHIP, and the Exchange so individuals are enrolled in the appropriate insurance affordability program and can retain coverage over time even as their circumstances change.

 The Centers for Medicare & Medicaid Services (CMS) is working with states to ensure that Medicaid and CHIP support modern approaches to business processes and standards of performance management as are found in the private sector and high-performing public programs. To that end, we are seeking public input to aid in the development of an initial set of business process indicators for all Medicaid and CHIP programs. CMS indicated in two final rules that it would begin to collect business process performance indicators for all Medicaid and CHIP programs in association with the development of new information technology systems: “Federal Funding for Medicaid Eligibility Determination and Enrollment Activities” (75 FR 21950) and “Eligibility Changes under the Affordable Care Act of 2010” (77 FR 17144.)

We intend to begin collecting and reporting on indicators in two primary domains: individual (applicant and beneficiary) experience with eligibility and enrollment; and provider experience with enrollment and claims payment. We intend to begin by generating baseline data and in subsequent years, as we progress in the development and testing of indicators, CMS and states will work together, with input from other stakeholders, to develop benchmarks and targets for performance improvement. For more information about the business process performance indicators and the public input we are seeking, please see the request for information online at The request for information also contains instructions for providing comments. Comments will be most helpful if received by March 8, 2013.

January 24, 2013

HHS Released New Guidance for Medicaid Eligibility & State Partnership Exchanges

There has been a lot of activity from the Department of Health and Human Services (HHS) over the past few weeks, including a new proposed rule from the Centers for Medicare and Medicaid Services (CMS) on Medicaid eligibility and new guidance from the Center for Consumer Information and Insurance Oversight (CCIIO) on state partnership exchanges

On January 14, CMS released a new Medicaid eligibility proposed rule and fact sheet that deals with several important aspects of how applicants will be enrolled in coverage beginning later this year, and what types of coverage they will receive. Specific areas covered include:

  • Coordination of notices and appeals between Medicaid, CHIP, and the exchange.
  • Certification of application counselors.
  • The Medicaid benefits package for the newly eligible adult population.
  • Changes to cost-sharing in Medicaid, including allowing states to increase cost-sharing for non-preferred drugs and non-emergency use of the emergency department and possible reduction of the maximum allowable cost-sharing for inpatient hospitals stays for those below 100 percent of the federal poverty level.
  • State options for determining Medicaid eligibility during the initial exchange open enrollment period at the end of 2013.
  • Allowing states to continue to impose waiting periods of up to 90 days for CHIP coverage.

Comments are due on February 13, 2013.

In addition, on Thursday, January 3, CCIIO released new guidance on state partnership exchanges that provides further information on the role of a state and the role of the federal government in both a plan management and a consumer assistance partnership exchange. Topics covered in the guidance include:

Plan Management Partnership Exchanges

  • The scope of state responsibilities, including recommending plans for qualified health plan (QHP) certification, recertification, and decertification to HHS.
  • The scope of HHS responsibilities, including receiving, approving (as appropriate), implementing, and overseeing state QHP certification and recertification recommendations.
  • Information regarding requirements for a state-specific memorandum of understanding (MOU) with HHS, which will include a description of how each state approved for a plan management partnership will review health plans for exchange certification.
  • A recommended timeline for state plan management partnership activities, including a requirement that partner states complete their part of the QHP certification process and provide required plan data and certification recommendations to HHS by July 31, 2013.

Consumer Assistance Partnership Exchanges

  • The scope of state responsibilities, including managing navigators, and developing, implementing and managing an in-person assistance (IPA) program.
  • The scope of HHS responsibilities, including funding and awarding grants to navigator entities, establishing conflict of interest, cultural and linguistic competency, and training standards for navigators, providing training for navigators and in-person assisters, and operating a single State Partnership Exchange call center and website.
  • State use of 1311 (exchange establishment) funding for navigator and in-person assistance programs and state options to permit agents and brokers to enroll consumers in qualified health plans through the exchange, develop additional training for navigators and in-person assisters, and conduct exchange outreach and education activities.
  • Information on the development of outreach and education plans. States must submit an outline of plans for these activities to HHS by March 29, 2013.


January 14, 2013

HHS Releases Proposed Rule on Medicaid, CHIP and Health Insurance Marketplaces

Today, the Department of Health and Human Services (HHS) released a proposed rule implementing key Affordable Care Act provisions relating to Medicaid and the Exchanges. This proposed rule codifies statutory eligibility provisions, lays out a structure and options for coordinating Medicaid, the Children’s Health Insurance Program (CHIP), and Exchange eligibility notices and appeals. It also proposes to modify existing benchmark benefits regulations for low-income adults, and codify several of the provisions included in the Children’s Health Insurance Program Reauthorization Act (CHIPRA).
This proposed rule includes information on how consumers will receive coordinated communications on eligibility determinations and can appeal eligibility determinations.  It gives states flexibility in designing benefits and determining cost sharing in the Medicaid program.  The proposed rule also provides flexibility to state-based Exchanges by allowing them to opt to rely on HHS for verifying whether an individual has employer-sponsored coverage and conducting some types of appeals.
The NPRM is available on display at the Federal Register here: <>
A fact sheet with additional information regarding the changes made through this proposed rule will be available on and <>  later today.
Please direct questions to [email protected] <mailto:[email protected]> .

January 15, 2013

Update on HHS Deadline to Establish a State Exchange

 The deadline for states to submit their letters to the Department of Health and Human Services (HHS) indicating their intent to establish a state exchange was December 14, 2012. In total, 20 states so far have been granted conditional approval to build either full or partial state exchanges. The deadline for exchanges to be complete is October 1, 2013.

The following states were conditionally approved by HHS Secretary Sebelius for building a state base exchange:

  • California, Hawaii, Idaho, Nevada, New Mexico, Vermont, and Utah, Colorado, Connecticut, D.C., Kentucky, Massachusetts, Maryland, Minnesota, New York, Oregon, Rhode Island, Washington

The following states were conditionally approved for building a partnership exchange:

  • Arkansas and Delaware

The following states have until February 15, 2013 to apply for a state partnership exchange or they will default to the federally facilitated exchanges:

  • Florida, New Jersey, Pennsylvania, Tennessee, Virginia

Tribal consultation policy is a factor of state exchange approval, but is not the deciding factor that will terminate the application if a state does not have one. Acceptance of the exchange proposal depends on the circumstances on various components. If a state has everything right in its proposal, except for tribal consultation, then the state could still get conditional approval. States blueprints are located on Center for Consumer Information and Insurance Oversight (CCIIO) website at

January 22, 2013

HMO-Like Plans May Be Poised To Make Comeback In Online Insurance Markets

Written by the Kaiser Family Foundation in collaboration with USA Today

It’s back to the future for insurers, which plan to sharply limit the choice of doctors and hospitals in some policies marketed to consumers under the health law, starting next fall. Such plans, similar to the HMOs of old, fell into disfavor with consumers in the 1980s and 1990s, when they rebelled against a lack of choice.

But limited network plans — which have begun a comeback among employers looking to slow rising premiums — are expected to play a prominent role in new online markets, called exchanges, where individuals and small businesses will shop for coverage starting Oct. 1. That trend worries consumer advocates, who fear skimpy networks could translate into inadequate care or big bills for those who develop complicated health problems.

Because such policies can offer lower premiums, insurers are betting they will appeal to some consumers, especially younger and healthier people who might see little need for more expensive policies.

Insurers, who are currently designing their plans for next fall, “will start with as tight a network control as they can,” says Ana Gupte, a managed care analyst with Sanford Bernstein.

Plans may also benefit from offering such policies because they are less attractive to those with medical problems, who can no longer be turned away beginning in January 2014.

“Plans will basically say they can minimize their risk by creating narrow networks,” says John Weis, president of Quest Analytics, an Appleton, Wis., firm that analyzes provider networks for insurers.

State or federal regulators, who must review the plans sold in the online markets, are unlikely to permit them to exclude an entire class of doctors, such as cancer or diabetes specialists.  But there might be more subtle ways to discourage consumers with medical problems.

“They might have too few oncologists, or only general oncologists,” for example, says Stephen Finan, senior director of policy with the American Cancer Society Cancer Action Network, an advocacy group in Washington.

Cost Vs. Choice

“Narrow networks may be more than adequate 90 percent of the time,” Finan says, but are “not well-suited to deal with complicated medical conditions and chronic diseases.”

That’s because there may be few or no specialists available for certain complex conditions, so patients may have to seek care outside of the networks. If the policy doesn’t cover non-network care, they may end up footing the bill themselves. Even if policies allow for outside the network coverage, patients can incur large copays or other costs. “Your (financial) exposure could be high,” Finan says.

The federal health law requires the policies to include a standard set of essential benefits, from emergency room and hospital care to prescription drugs, but the law is less prescriptive about the size of the policies’ networks of participating doctors and hospitals.

In March, the Obama administration issued rules stating that insurers must “maintain a network of a sufficient number and type of providers, including providers that specialize in mental health and substance abuse, to assure that all services will be available without unreasonable delay.”

That fell short of the specific standards sought by some consumer advocates, but pleased other groups that say insurers should have broad discretion to shape their networks to meet regional needs.

The administration noted that “nothing in the final rule limits an exchange’s ability to establish more rigorous standards.”

Shaving Costs

Insurers contend that by limiting network size, they can offer plans with higher quality or more efficient doctors and hospitals, which might slow spending or improve care.

Networks are already part of most health plans. For doctors and hospitals, joining a network brings in business. In exchange, they agree to negotiate their prices with insurers.

Driven by consumer and employer demand for lower-cost plans, insurers are already rolling out narrow network policies that have shaved premiums 10 percent or more.  A recent survey by benefit firm Mercer found that 23 percent of large employers offered such plans this year, usually among a choice of plans, up from 14 percent in 2011.

In Massachusetts, insurer Harvard Pilgrim launched its Focus Network in April, touting 10 percent lower premiums. While it includes 50 hospitals and 16,000 physicians, it excludes some of the state’s highest-cost systems.

In California, Blue Shield has a number of SaveNet HMO plans that contract with select doctor and hospital groups, creating networks averaging a little more than half the size of its standard ones. Next year, for example, one serving Marin and Sonoma counties will offer a network of about 100 primary care doctors and 325 specialists.

Still, narrow network plans are a hard sell to employers, particularly the large ones, which don’t want to hear gripes from workers about limited choice of doctors simply to save 10 percent on premium costs.

But small businesses and individuals buying their own coverage in the online markets might regard that tradeoff differently.  “If my doctor is in the [narrow] network and cheaper, it might work,” says Wall Street analyst Carl McDonald at Citi Research, a division of Citigroup Global Markets.

Competing On Price

To stand out from competitors, some plans may choose to offer the lowest possible rates, and would “narrow their networks” to do so, says Chet Burrell, CEO of insurer CareFirst in Maryland.  He acknowledged that narrow networks could be “a subtle but powerful way” to discourage less-than-healthy applicants. “The question will be what degree of tolerance will a state have to permit narrow networks?”

State rules on what makes an adequate insurance network vary.  Some states, including California, specify that specialists must be available within a certain driving time or distance. Others simply say insurers must have sufficient numbers of providers.  Some states don’t have any requirements.

“State rules are very, very loose,” says Weis at Quest, who says states should consider adopting the rules that now apply to Medicare Advantage, the private market alternative to Medicare.  In that program, the federal government requires networks to include primary care physicians and more than 25 types of specialists, and sets county-level requirements on both the minimum number of doctors required in each category and how far patients might have to travel to see one.

Even though state rules vary, regulators say plans that are too skimpy will be called out by regulators, consumers or both.

“We will look very closely at how plans put their packages together,” says Sandy Praeger, the elected insurance commissioner in Kansas.

“If you have a crummy network, no one will buy the plan,” says consultant Robert Laszewski, a former insurance executive, adding the law also includes programs that financially reward insurers that get a large share of sicker patients and penalize those that get a healthier and more profitable bunch.

Many policies that currently offer a limited network of doctors and hospitals generally allow patients to go to out-of-network providers, with whom they do not have negotiated prices. But patients who seek such care face significant co-payments, which often start at 30 percent of the bill and can go as high as 50 percent. 

It is often hard for consumers to figure out how much they might be charged if they go out of network, says Lynn Quincy, senior policy analyst at Consumers Union, publisher of Consumer Reports magazine.  In addition to meeting separate annual deductibles for out-of-network care, patients can be “balance-billed” by doctors or hospitals for the difference between what the insurer pays them and their total charges.

That doesn’t change under the federal health law, so consumers could be left on the hook for tens of thousands of dollars.

“There’s no escaping that we’re going to see” insurance policies that include networks both wide and narrow, says Quincy. “That can be OK if there are much better tools to reveal to consumers how adequate those networks are and how much it might cost to go outside of them.”