Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
Exchanges are required by PPACA to perform many activities in addition to the
operation of a web portal and toll-free telephone number. These responsibilities
include integrating with public programs for eligibility and enrollment, determining
eligibility for premium and cost sharing subsidies, and maintaining a "calculator"
to determine actual member premiums after the subsidy amount is deducted.
HHS has not provided guidance, to date, on how carriers will interface with
Exchanges to perform critical enrollment, billing and collections activities.
However, since the Exchanges have the responsibility to determine subsidy
levels and communicate member premiums, we believe it is likely that the
Exchanges will play a key role in these activities. This is particularly true for the
SHOP exchanges, where the employees of a single employer may have the
ability to choose from multiple health plans. If the Exchange does not perform a
billing and collection coordination function, the employer may receive multiple
bills each month, creating a significantly increased administrative burden. In
addition to enrollment, the issue of renewals will need to be addressed.
Recommendation:
Our organization believes the appropriate business functions for the Exchange
should be narrowly tailored towards creating access to high quality health
insurance products for all Kansans. This entails simplifying the application
process for individuals, small business owners and their employees while
fostering competition for quality and affordable insurance options from insurance
carriers. The ultimate goal for the Exchange should be to avoid redundancy for
consumers and carriers through utilizing local and existing resources.
The Exchange should perform the following functions:
1) The Exchange should determine the eligibility of the applicant and all
family members. This includes verification of citizenship, the applicant(s’)
legal residence, tax payer information, and income verification.
2) The Exchange should access federal and state systems to identify the
most accurate information for applicants, and this data can be built into a
Focus/Business Operations Working Group
March 14, 2011 Page 1
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
calculator that can consider subsidy amounts when presenting the cost
difference among benefits and products.
3) The Exchange should provide insurance carriers with eligibility, subsidy
amounts and enrollment information electronically using HIPAA standard
transaction (834). This transaction must be completed prior to the
insured’s coverage effective date.
4) The Exchange should also provide the carrier and the Treasury with the
applicant’s benefit selection by carrier, premium, and subsidy amount in a
real-time environment. Furthermore, these functions should be the same
whether an applicant is enrolling as an individual or through the SHOP
Exchange.
The Kansas Health Benefit Exchange should act as the initial comparison
shopping location for consumers who do not wish to purchase insurance outside
of the exchange, but enrollment maintenance and benefits customer service
support should be handled by the appropriate carrier. If the Exchange planned
on providing customer service support on its own, Kansas would need
approximately 2,500 call center employees to ensure that all of the enrollment
back office operations are handled efficiently and correctly. A vendor may offer
to provide these services for the Exchange, but they may not be scaled up to
manage the demand. This is risky and can affect the success of the Exchange.
It is critical that individuals and small business owners have a positive experience
as soon as the Exchange is launched. The Exchange will not be liable if
customers are unsatisfied with their enrollment management and service.
However, carriers will be responsible and their ratings may be affected if service
levels are poor. Also, the state can address problems with a carrier’s service by
dropping the offending carrier’s products from the Exchange. There would be
little to no recourse with an Exchange vendor.
It is important to understand that if the Exchange and its vendor provide ongoing
customer service to enrollees, it would be duplicative to the work that carriers
handle today. At our company all of these jobs are performed locally by
Kansans. We should avoid outsourcing these positions and strive to keep these
jobs and activities local to meet the needs of Kansans.
Focus/Business Operations Working Group
March 14, 2011 Page 2
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
Our organization believes the appropriate business functions for the Exchange
should be narrowly tailored towards creating access to high quality health
insurance products for all Kansans. This entails simplifying the application
process for individuals, small business owners and their employees while
fostering competition for quality and affordable insurance options from insurance
carriers. The ultimate goal for the Exchange should be to avoid redundancy for
consumers and carriers through utilizing local and existing resources.
The Exchange should perform the following functions:
1) The Exchange should determine the eligibility of the applicant and all
family members. This includes verification of citizenship, the applicant(s’)
legal residence, tax payer information, and income verification.
2) The Exchange should access federal and state systems to identify the
most accurate information for applicants, and this data can be built into a
calculator that can consider subsidy amounts when presenting the cost
difference among benefits and products.
3) The Exchange should provide insurance carriers with eligibility, subsidy
amounts and enrollment information electronically using HIPAA standard
transaction (834). This transaction must be completed prior to the
insured’s coverage effective date.
4) The Exchange should also provide the carrier and the Treasury with the
applicant’s benefit selection by carrier, premium, and subsidy amount in a
real-time environment. Furthermore, these functions should be the same
whether an applicant is enrolling as an individual or through the SHOP
Exchange.
The Kansas Health Benefit Exchange should act as the initial comparison
shopping location for consumers who do not wish to purchase insurance outside
of the exchange, but enrollment maintenance and benefits customer service
support should be handled by the appropriate carrier. If the Exchange planned
on providing customer service support on its own, Kansas would need
Focus/Business Operations Working Group
March 14, 2011 Page 3
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
approximately 2,500 call center employees to ensure that all of the enrollment
back office operations are handled efficiently and correctly. A vendor may offer
to provide these services for the Exchange, but they may not be scaled up to
manage the demand. This is risky and can affect the success of the Exchange.
It is critical that individuals and small business owners have a positive experience
as soon as the Exchange is launched. The Exchange will not be liable if
customers are unsatisfied with their enrollment management and service.
However, carriers will be responsible and their ratings may be affected if service
levels are poor. Also, the state can address problems with a carrier’s service by
dropping the offending carrier’s products from the Exchange. There would be
little to no recourse with an Exchange vendor.
It is important to understand that if the Exchange and its vendor provide ongoing
customer service to enrollees, it would be duplicative to the work that carriers
handle today. At our company all of these jobs are performed locally by
Kansans. We should avoid outsourcing these positions and strive to keep these
jobs and activities local to meet the needs of Kansans.
In order to begin to answer this question, the segmentation of the health
insurance consumers, to which the Exchange will direct its solutions, must be
defined. The functionality can then be developed for each of these distinct market
segments.
These market segments are:
1. Public/K‐Med/ SCHIP
2. Individual Subsidized Coverage (From 133% to 400% of FPL)
3. Individual/Family Private Coverage
4. Small Group
5. Large Group
With the market segments defined, you can then decide what functionality the
Exchange should develop for each of the market segments:
1. Exchange Portal (Internet point of entry)
2. Income Qualifier / Subsidy Calculator
3. Proposal (Premium estimator / Benefit Plan Summary)
Focus/Business Operations Working Group
March 14, 2011 Page 4
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
4. Underwriting
5. Approval
6. Fulfillment (Policy issue & delivery with ID cards, etc.)
7. Billing (updating eligibility, billing, subsidy transactions, collections)
8. Policyholder / Customer service
9. Renewal / Terminations
10. Reports, statistics, and analytics (data gathering, warehousing, and
consumer communication)
Given the challenges with regard to the development and ongoing operation of
the Exchange, the Exchange should be developed in the following format:
Individual Market – Exchange functionality developed for all individual market
segments:
1. Exchange Portal
2. Income Qualifier
3. Proposal (Premium estimator / Benefit Plan Summaries)
Individual/Family Private ‐ Assuming that there is no individual subsidy
available (income greater than 400% of FPL), then the Exchange should provide
links to private health insurers who offer certified plans.
All other functions for this market segment shall be provided by the carriers.
(Functions 4‐ 9 handled by private carrier.)
Individual Subsidized ‐ If the Income Qualifier indicates that the individual is
eligible for a subsidy, then the following functions should be handled by the
Exchange:
4. Underwriting (Handle the application process)
5. Approval
All other functions for this market segment shall be provided by the carriers.
(Functions 5‐9 handled by private carriers.)
Individual Public/K‐Med/SCHIPS ‐ If the Income Qualifier indicates that the
individual is eligible for Medicaid/SCHIPS/Other Public coverage, then the
Exchange should perform the following functions:
Focus/Business Operations Working Group
March 14, 2011 Page 5
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
4. Underwriting (Handle the application process)
5. Approval
All other functions for this market segment shall be provided by K‐Med and its
partners.
Group Market – Exchange functionality developed for small group market
(SHOP) segment:
1. Exchange Portal
2. Small Group Tax Credit Estimator
All other functions shall be performed by private health insurers. Whether the
group qualifies for a tax credit, or not, the Exchange shall provide links to carriers
who have established certified small group plans.
Private small group insurance carriers shall provide all other functions. (3‐ 9
handled by private carrier.)
Reports/statistics/analytics – The issuers (both private and public) shall collect
data as directed by the Exchange/KID/Kansas Legislature. The data shall be
formatted and submitted to the Exchange/KID as directed.
The Exchange, in partnership with the active/qualified private and public issuers,
and in partnership with other Public partners (KID and/or other governmental
departments), shall make the reports/statistics/analytic information available to
the public as directed.
Ultimately, the exchange should provide a storefront type of approach to
individuals and small business seeking coverage from the exchange.
As commonly stated theme in the presentation and other reading materials the
exchange should be a one stop shop allowing participants to perform the
following tasks:
Focus/Business Operations Working Group
March 14, 2011 Page 6
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
1. Eligibility determination – Single/Small Business, resident status,
determine what plans individuals are eligible for based on income, etc.
2. K-Med/SCHIP, Public Programs, health plans, brokers and navigators
coordination
3. Plan selection – allow user to sort plans by cost, coverage etc., allow them
to compare plans side-by-side, provider search and possibly decision
support based on medical consumption
4. Subsidy calculation and remittance
5. Enrollment within Exchange portal is critical, need to minimize any
handoffs where confusion may occur, resulting in a non-enrollment.
6. Customer support – 800 number preferably
7. Premium billing - Allow individuals or small business to set up automated
billing
8. SHOP Support – Billing, enrollment, COBRA
9. Aggregated Billing to carriers and federal government
BRAVO ASSIGNMENT – first take.
The functions of the exchange will have to focus on eligibility, outreach,
and matching consumers up with insurance plans.
Problem #1: While it can be expected that the eligibility criteria will be
clear for each level of subsidy, problems with consumer outreach can also be
expected.
Many uninsured consumers will not want to bother applying to the
exchange because they will not need health care at the moment.
This could lead to a sizeable minority of consumers who are willing to pay
the tax penalty for not being insured.
This would then lead to cost-shifting again to cover uncovered emergency
care for this group.
Focus/Business Operations Working Group
March 14, 2011 Page 7
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
Therefore, the outreach function of the exchange should be implemented
to start at a high level of resources until this trend can be evaluated.
Problem #2: Many consumers will go to their primary care providers to
find out which plans they should purchase.
Therefore it is important that easy-to-use educational materials for health
care providers is disseminated widely before the exchange starts up.
Initial Take - We are in support of the following required* and optional
business functions of the Individual and SHOP Sub-Exchanges
(responsible, interfaced* organizations):
Eligibility/Demographics (K-MED Shared Services)
Eligibility Verification for Medicaid and CHIP* (DHS, IRS, SSA, etc.)
Eligibility Verification for Premium and Cost-Sharing Credit*
Lifetime Member Key (track members who come in and out of exchange)
Demographic and Economic Data Management*, Life Events, etc. (no
―wrong door‖)
Family or Household Integrated View (member, spouse, dependents)
Coordination of Benefits Management (validation of no other coverage)
Offering Determination (Exchange)
Certify, Recertify and Decertify Plans*
Health Plan Value Assessment for Quality (standards of care) and Price*
Outreach (Navigators)
Non-Urban/Rural Needs Support
Urban Core Needs Support
Enrollment (Exchange)
Enrollment Period Provision* (HHS-defined annual enrollment period and
special enrollment periods defined by PPACA)
Navigator Sign-Up and On-Boarding
Third Party Broker Sign-Up and On-Boarding
Focus/Business Operations Working Group
March 14, 2011 Page 8
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
Multi-Channel Plan Selection* and Application/Enrollment Assistance*
(customer/navigator/broker support, online self-service*, online
assisted/co-browsing, assisted call center*, face-to-face/in person, paper
applications*; accept e-signatures and telephonic signatures)
Benefit Transparency* (standardized, easy to read form to present benefit
options)
Subsidy Determination*
Premium Display, including Premium and Cost-Sharing Credits* (online
calculator for actual cost of coverage)
Network Transparency* (search for plans based on a participating provider
or search for providers within a plan—database that connects providers to
network participation by benefit plan and health plan)
Provider Selection* (e.g., HMO, modified PCMH-type networks)
General Support (Exchange)
Speed of Customer Web Experience; Real-Time Processing; System
Availability 24/7
Toll-Free Hotline* and Online Support (application status, policy status,
payment status)
Multiple Language Capabilities
Interfaces with All Appropriate Partners and Entities (health plans,
treasury, Navigators, brokers, etc.)
Data Storage (calls, e-mails, written correspondence) and Reporting*
(application status, enrollment issues)
Compliance with HIPAA/PHI and Other Requirements*
Billing/Payment/Collections/Reconciliation (Health Plans)
Billing to Members, Groups, and Treasury (non-subsidy premium and
subsidy)
Receivables or Payment Collection from Members, Groups, and Treasury
Payment Delinquency and Cancellation Handling (exchange notification
and premium subsidy refunds)
Payments to Third Party Brokers and Navigators
New Member and Ongoing Member Communications (Health Plans)
Welcome Package and Card Issuance
Focus/Business Operations Working Group
March 14, 2011 Page 9
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
Explanation of Benefits
Customer Support for Benefits Administration
Utilization Management, Case Management, and Disease
Management
Automatic Re-Enrollment Notification
Member Experience Surveys
Broker Relations (Health Plans)
Enrollment
Orientation and Ongoing Training
Commissions
Provider Networks (Health Plans)
Credentialing
Contracting
Ongoing Relations and Communications
The Exchange should perform all of the functions assigned to it under Section
1311(d) (4) of the law without diverging significantly from those areas. Many of
the functions identified in the ACA are clear and straightforward and require little
discussion, for example:
• Operating a toll hotline
• Maintaining website to provide standardized comparative information on
plans
• Using a standardized format to present plan options
• Creating and making an electronic calculator for individuals to calculate
their health costs after any tax credits
• Certifying that individuals comply with or are exempt from the individual
mandate
• Transferring the names of individuals to the Treasury who met the
certification requirements under the mandate provision or were employed by an
employers who did not offer minimum essential coverage or such coverage was
unaffordable
Focus/Business Operations Working Group
March 14, 2011 Page 10
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
• Providing employers with the names of any employee who ceases
coverage under a qualified health plan
With respect to other functions under Section 1311(d) (4), we recommend the
following:
• Certifying, Decertifying, Recertifying Plans for Exchange Participation: The
Exchange should perform this function in conjunction with the expertise at the
Kansas Insurance Department (KID). The Exchange should not create separate
standards, duplicate, or replace efforts of the KID.
• Assigning Quality Ratings: The Exchange should closely follow the
HHS/CMS guidance for assigning quality ratings. It will help reduce
administrative costs and allow consumers to more readily compare information
across plans and across states.
• Eligibility Determinations for Other Programs: The Exchange should be a
leader in applying a technological solution to make eligibility determinations. It
would be a significant step forward if individuals were able to go to the Exchange
and receive real time information and eligibility determinations for Medicaid,
CHIP, and other state/local program and take the step to enroll those individuals
in programs for which they are eligible.
With respect to the specific examples in the Bravo questions above, the
Exchange should perform an aggregator function for small businesses. It is
unclear how such a function would practically work for small businesses and
what objective is being addressed. Most important, the Exchange should be a
facilitator—not an active purchaser—that limits the choice of plans to consumers
or small businesses because the active purchaser model may limit competition,
create barriers to new plan entrants, lead to higher long term costs, and has the
potential to favor dominant carriers.
We believe offering a consumer-centric solution which offers a robust, end-to end
consumer experience from shopping to enrollment is critical to the long-term
success and sustainability of the Kansas Exchange. The Exchange must also
focus on simplicity, ease of use, and must provide education, outreach and
technical assistance for consumers. The Exchange should also provide an
Focus/Business Operations Working Group
March 14, 2011 Page 11
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
extensive suite of consumer and member management services, ranging from
initial enrollment and billing to ongoing maintenance transactions.
In addition, it is important to clarify the term exchange as it is often used
interchangeably with the word portal – while we believe it to include a portal, the
Kansas Exchange must include both the presentation layer (i.e. the front door) as
well as all of the back-end interfaces, workflows, data warehousing,
outreach/education programs, etc. For example, once on the Exchange portal, a
robust technology engine would prompt for specific data captures (i.e. age and
zip code) as well as offer various sorting filters to capture personal preferences in
order to present plan options and pricing. Part of the Exchange workflow would
include real-time interfaces to the appropriate federal/state agencies for eligibility
and subsidy determination as well as to carriers for real-time/near real-time
enrollment confirmation.
Specifically, the functions that should be provided by the Kansas Exchange (or
by its selected vendor/vendors) include the following components:
1. Navigator Support
a. Provide training and support of Exchange processes and products
2. Marketing / Public Outreach
3. Eligibility / Subsidy Determination (State and Federal Coordination)
a. Real-time Interface with K-MED
b. Real-time Interface with HHS which is building a front-end to other
agencies for specific eligibility/verification – i.e. IRS (for MAGI),
Homeland Security, etc.
4. Product Availability
a. Establish policies to determine which products will be available
i. Including ancillary products such as dental, vision, HSAs as well
as FSAs and Premium Only (POP) in the SHOP
5. Comparison Shopping Tools
a. Search plans based on provider (Exchange would warehouse an ―All
Provider‖ database)
b. Search on plan design and/or price
c. Search on quality ratings, including member reviews
Focus/Business Operations Working Group
March 14, 2011 Page 12
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
d. Cost calculators
6. Enrollment and Eligibility Maintenance
a. Application Processing: paper, internet and phone
7. Customer Service
a. Individuals, SHOP, Brokers
b. Multiple language capabilities
8. Premium Collection / Reconciliation
a. Premium billing/e-reminders
i. Billing should display premium reduction and reason
b. Central premium collection process (multiple options: check, ACH,
credit card, etc.)
c. Remittance process to payers
d. Aggregated list bills for employers (all employees and all plan types –
health, dental, vision, etc.)
e. Subsidy collection
9. Broker Support
a. Broker Registration / Access
b. Track and Pay Broker Commissions
The Exchange‘s should seek to limit its functions to those specifically outlined
and delineated in the ACA legislation while leveraging the considerable expertise
of the private insurance industry to provide integrated customer experience
functions. The Exchange should focus its efforts on traditional governmental
functions where it can control interactions between local, state, and federal
entities, as necessary, and deliver on three basic tasks 1) regulate insurer
participation in the exchange, and 2) control / regulate the Exchange‘s data
aggregation, presentation, and data-exchange between participating entities
and/or regulating bodies, 3) facilitate the qualification for and distribution of
federal/state subsidies as required. What the Exchange should NOT seek to do
is to seek to become a centralized front and back-office thereby creating a
significantly larger bureaucratic organization than necessary. This is especially
true since the burden of costs associated with the exchange will eventually be
Focus/Business Operations Working Group
March 14, 2011 Page 13
Bravo - Question: What will be the business functions of the
Exchange, i.e. what does state want it to do? For example, will
the Exchange perform aggregator functions for small
businesses? What exactly would that entail? (Need to define
eligibility and enrollment and the functional line between K-MED,
the Exchange and the Provider’s system) Does this include
enrollment?
passed to participating (and I suspect non-participating but state-regulated)
private industry organizations through user and participant fees, charges, and
assessments.
We do not believe the Exchange should expand its business functions beyond
those articulated in the ACA legislation. Further, the expectation is that the
Exchange, even in its articulated responsibilities, would also narrowly define the
scope of each. A specific example is the customer service inquiry hotline – we
believe a limited approach to this requirement, which would satisfy the ACA law
is to provide customer service for website navigational issues only while
providing transfer functionality for questions related to plan design, pricing,
billing, provider access, etc … on to each participating qualified/participating
health-plan. This does not argue against a robust web-based functionality to
assist in the individual/group decision-making; the argument is for using existing
private industry resources where that use is both appropriate and cost-effective.
In another vein, the Exchange organization should provide standards for
measuring and reporting customer satisfaction but could leave the actual data
collection responsibilities to private industry and provide only an aggregation and
display functionality.
We will admit to a particular concern that the ‗software‘ demonstrations to date
seem to position the vendor(s) as the defacto back-office and clearinghouse for
many of the traditional functions of private insurers, e.g. enrollment/eligibility,
financial (billing and collections), etc … this is especially concerning since in
actuality most of these proposed duties depicted by the vendors are fictional –
i.e. not actually performed by the vendors today but rather notionalized into their
existing platforms. We would caution against a ‗one-size fits all‘, ‗we-can-deliver‘
everything approach, preferring a balance/integration between the existing
capabilities of the state‘s private insurers today and the web-technology
necessary to support the essential functions of the Exchange in providing data
aggregation and dissemination.
Focus/Business Operations Working Group
March 14, 2011 Page 14