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WASHINGTON---Maryland is an example of a state that has plowed forward to establish a health insurance exchange with a governing board put in place in June and preparations to hire organizations to examine operations models and other issues to recommend to lawmakers in December.
Like other leading states, Maryland passed legislation this year for the authority to develop a health insurance exchange, said Dr. Josh Sharfstein, Maryland Secretary of Health and Mental Hygiene. He is also a member of the Health IT Policy Committee, which advises the Office of the National Coordinator for Health IT.
“Maryland sees the exchange as one piece of the bigger healthcare puzzle, where cost is such an issue. There was broad consensus that Maryland should establish an exchange,” he said at a July 27 conference sponsored by the Bipartisan Policy Center, the Kaiser Family Foundation, and the University of Virginia. The Bipartisan Policy Center is a think tank established by former Democratic and Republican Senate majority leaders to address tough policy challenges, including health care.
Many states have been consumed with the tasks of proposing and enacting legislation, creating governing boards and advisory groups representing a wide range of interests to establish health insurance exchanges and to identify gaps in their eligibility IT systems, according to exchange officials from a variety of states. The health reform law called for the exchanges to be operational in January 2014.
The exchanges will be a single destination where consumers and small businesses will be able to shop for, compare and enroll in health insurance plans, similar to banking and e-commerce portals. They will also enable individuals to determine if they qualify for Medicaid, tax credits or cost-sharing reductions.
Despite Maryland’s progress, the information technology challenges are “fierce,” Sharfstein said. Insurance exchanges rely on an IT foundation, especially modernized eligibility systems for Medicaid and other state-administered health and human services.
Many states need to update or acquire new systems that are capable of performing more technical and service functions.
“We can’t launch our health eligibility system separately but must be at the same time as the exchange,” he said. “There has to be seamless integration. When someone shows up in the system, we have to know whether they go to Medicaid or the plans on the exchange,” Sharfstein added.
States are waiting for additional guidance on eligibility from the Health and Human Services Department, which released the proposed insurance exchange rule on July 11 and will accept public comment on changes until Sept. 28.
Kansas, on the other hand, had prepared to modernize its state eligibility system before the insurance exchange was mandated so it needed only to revise some of its plans with its vendor, said Linda Sheppard, director of the accident and health division and health reform law project manager in the Kansas Insurance Department. Work on its eligibility system will start in early August, she added.
State eligibility systems are expected to be able to access a federal data hub to confirm income and eligibility information of applicants so states can provide coverage under Medicaid, Children’s Health Insurance Program and other programs.
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On the exchange side, however, advisory groups in Kansas have been meeting for several months on policy and insurance market issues but will not introduce legislation until 2012.
More than one third of states have begun laying the foundation for health insurance exchanges, including 13 state legislatures having passed laws to establish marketplaces, according to a progress report released July 27 by the Kaiser Family Foundation. Instead of legislative activity, the governors of Alabama, Georgia and Indiana issued executive orders to study state exchanges.
Utah and Massachusetts created exchanges before 2011.
HHS awarded early innovator grants to six states, including Maryland, Kansas and Oregon, and one consortium of states to investigate options for building the IT infrastructure and to enable other states to use parts or all of the systems.