Exchange deadline creeps closer

By John Andrews
12:15 PM

Supreme Court decision on Obama mandate a factor

While the provider community heaves a collective sigh of relief over the anticipated extension of the ICD-10 implementation date, another important deadline is right behind it. What happens to the state health insurance exchange requirement in the Affordable Care Act, however, may depend on how the Supreme Court rules on the individual mandate part of President Obama’s healthcare program.

As the law now stands, hospitals and health systems must have the health insurance exchange infrastructure in place by 2014. Few are ready to commence with the ambitious project, industry analysts say.

“Large health systems are well positioned, but the concern is with the smaller community hospitals and hospitals in underserved urban areas,” said Cristine Vogel, associate director for Chicago-based Navigant Healthcare. “By 2014 they will be required to report patient data through the health plans and exchange.

That is sooner than we think. But there are many issues more urgent than this one that may not be on the radar screen yet.”

Health insurance exchanges – also known as health benefit exchanges – were conceived by the Affordable Care Act to serve as a portal for individuals to sign up for health coverage and compare rates online. The exchanges are to be administered by the states, with Massachusetts serving as the beta site. While each state is charged with developing its own exchange, no guidelines have been released and the status of the Obama healthcare program is up in the air as the Supreme Court decides whether the individual mandate portion is constitutional – a decision expected in June.

“Many uncertainties exist with this,” Vogel said. “But if the individual mandate is allowed to continue, providers must be ready to report data to the exchange by 2014 and at this point they are not in a position to do that.”

Security an issue

The exchange format in which providers report data to payers, who in turn entrust the data to the states, raises some questions – namely, how secure will the data be in this system?

“The biggest concerns are the security issues, privacy, and potential federal, state and local regulations,” says Mary Ann Holt, RN, partner with Chadds Ford, Pa.-based IMA Consulting. “How to protect this information is of utmost concern. How is the data provided? Who is authorized to provide the data? And who can access it? There are various levels of authentication and there need to be assurances that there will be no breaches.”

Another major concern, Holt said, is with how the exchanges will evolve in the future and whether they will be used for predictive modeling forecasts and other health management projects.

“There are variables with health information and if they are not considered it becomes a privacy issue in the way the data is used and interpreted,” Holt said. “Some information is sensitive – while one person may think a pregnancy is positive, another may not. If this information gets out to the wrong person, it becomes an issue.”

Will exchanges survive?

However the Supreme Court settles the individual mandate question, health insurance exchanges most likely will continue forward, says Kevin Arner, CEO of Jacksonville, Fla.-based PaySpan.

“They are under heavy scrutiny, but health insurance exchanges will live on and in a very constructive way,” he said. “They level the playing field in terms of purchasing and the effectiveness of normalizing products across the field is an economic factor that will be favorable, and states will use it to regulate the industry." Even so, the kinks in the system will have to be ironed out along the way, he said.

“There are many broad-reaching issues – participation, the adoption rate and creation of a new economic model in a short timeframe are challenges that go beyond orchestration of the technical elements,” Arner said.