You'd think, with the Supreme Court having declared the Affordable Care Act (a.k.a. Obamacare) constitutional, and the election going President Barack Obama's way, that there'd be no more delay in implementing health insurance exchanges. But you'd be wrong.
Now, it's a software problem. Several of them, in fact -- and IT is the linchpin behind Obamacare. In the report "Establishing the Technology Infrastructure for Health Insurance Exchanges Under the Affordable Care Act: Initial Observations from the 'Early Innovator,' " the National Academy of Social Insurance wrote:
To successfully implement health reform, states will need to develop IT systems that securely facilitate the movement of information in near real-time to provide consumers with answers about their eligibility for public health insurance benefits or tax subsidies, and enhance their ability to enroll in health insurance coverage.
Most recently, the problem is a three-month delay in updating SERFF, the System for Electronic Rate and Form Filing, which most insurers use to submit their policies for state and federal approvals. While it was supposed to be ready next month, it is late because it is reportedly waiting for new regulations from the Obama administration.
But this is just one example. For several months, alarm bells have been ringing around IT implementation issues for the exchanges. iHealthbeat reported in May:
Fewer than 20 states have made significant progress in creating their exchanges. Even states that already have taken steps to develop the exchanges, such as California, are behind in contracting with IT vendors.
A health consultant with Deloitte estimated that only about seven states have finalized contracts with IT vendors to help establish their systems.
The result, wrote J. Lester Feder of Politico in May, is that:
Even if all the states that have taken the biggest steps to launch exchanges -- fewer than 20 at the moment -- were charging full speed ahead, there's a lot of concern that they'll have to switch to a 'partnership' exchange model, with the federal Department of Health and Human Services running key functions. That's because their IT systems could fail final tests in the months before the exchanges open in 2014. And that would mean losing some of the ability to customize the enrollment process for a state's needs.
So far, states such as Maryland and Kansas, as well as Massachusetts, are leading the way in health insurance exchange (HIE) IT development. In addition, a consortium of 17 states has worked together to help define at least some of the tools, which could help other states come up to speed more quickly.
Part of the problem is that each state's insurance exchange system has to partner with a federal data hub -- which is not intended to be available until October 2013.
Further complicating the issue is that the company contracted in January to design and build the federal data hub, QSSI, was recently acquired by UnitedHealth Group, which just happens to own an insurance company, United Healthcare. Consequently, some legislators, such as Sen. Orrin Hatch (R-Utah), are concerned about a conflict of interest.
It didn't help assuage these concerns when the company failed to disclose the acquisition to the Security and Exchange Commission or the Department of Health and Human Services. Alexander Bolton wrote in Healthwatch, a healthcare blog column for the Congressional blog The Hill:
The quiet nature of the transaction, which was not disclosed to the Securities and Exchange Commission (SEC), has fueled suspicion among industry insiders that UnitedHealth Group may be gaining an advantage for its subsidiary, UnitedHealthcare.
States are also dealing with hackers attempting to break into the systems, such as an attack earlier this fall on Utah's systems.
In addition, fully implementing the exchanges requires most states to upgrade their Medicaid systems. as well. While improving the Medicaid systems offers the promise of streamlining the process and reducing fraud and duplication, some of the systems are decades old. In January 2012, a study by the Kaiser Family Foundation found that only one state, Oklahoma, had a fully-automated Medicaid enrollment system that could process applications in real-time, noted Politico.
And even states that throw up their hands and leave implementation to the federal government will still need to link it to in-state systems such as Medicaid.
While some states had already been upgrading their Medicaid systems, some were having a terrible time with it. In one example of Maine's case, Government Health IT wrote:
The State was unable to process claims for six months and issued $575 million in interim estimated payments to providers. After a major remediation release failed in 2006, it was evident that the system would never be federally certifiable and a decision was made to replace it. Maine would need to start over.
Similarly, in 2010, Idaho, switched to a new system run by Molina, which resulted in hundreds of providers not being paid for their services for months.
States work with a variety of vendors for Medicaid support, such as Xerox, which operates Medicaid systems for 12 states (including, recently, California, a $1.7 billion contract it took from HP after its purchase of Electronic Data Systems) and the District of Columbia, and works with 38 of 50 states on some aspect of their Medicaid programs. Louisiana, for example, earlier this year signed a $185 million contract with CNSI to upgrade its Medicaid system.
Keeping in mind this is all happening against a backdrop of red ink and cuts in state budgets, it will be interesting to see how states end up managing the process.
— Sharon Fisher, @slfisher, is a veteran computer journalist who has been on staff at InfoWorld, CommunicationsWeek, and Computerworld. Her freelance work has appeared in numerous publications and online sites.