Health Insurance Exchange Deadlines Challenging for States, IT Firms

By Brian T. Horowitz  |  Posted 2013-06-29

Health Insurance Exchange Deadlines Challenging for States, IT Firms

As an Oct. 1 deadline approaches for open enrollment in health insurance exchanges (HIXes), mandated under the Affordable Care Act, IT vendors, the federal government and states are rushing to complete the HIXes in time.

The Government Accountability Office (GAO), the watchdog arm for Congress, issued a report June 19 stating that HIXes are behind schedule to meet this deadline. The study was requested by Sen. Orrin Hatch (R-Utah), Rep. Darrell Issa (R-Calif.) and Rep. Fred Upton (R-Mich).

"Whether [the government's] contingency planning will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined," the GAO stated in its report, "Status of CMS Efforts to Establish Federally Facilitated Health Insurance Exchanges."

Under the ACA, or Obamacare, which the Supreme Court upheld June 28, 2012, in a 5-4 decision, states must set up Web-based marketplaces for consumers to purchase health care plans. Coverage for these plans must begin by Jan. 1, 2014.

The HIXes will be similar to travel sites such as Travelocity and Expedia.

Under the ACA, the federal government will step in and implement exchanges for states that decline to build them. The Centers for Medicare and Medicaid Services (CMS), which oversees all the exchanges, will run insurance marketplaces for 34 states, but 15 of these states will manage some functions of the exchanges. Some states are behind schedule to set up these functions, according to the GAO.

CMS is establishing a federal data services hub that will connect various state HIXes to determine consumer eligibility for health plans. The data hub will provide near-real-time access to federal data on eligibility and connect to data from states and state agencies.

"While CMS has met project schedules, several critical tasks, such as final testing with federal and state partners, remain to be completed," according to the GAO report, which collected information from CMS.

"The big challenge everybody agrees on is the creation, functionality, interoperability and connectivity of the data hub," said Patrick Riley, a senior industry analyst for Frost & Sullivan's Connected Health business.

The data hub will collect the eligibility and enrollment databases for the exchanges, which are expected to enroll about 7 million people, Riley told eWEEK. "It's a massive network to be able to have the interoperability and connectivity across the spectrum," he added.

Among the 55 contractors working on the CMS data hub are CGI Federal, Quality Software Services and Booz Allen Hamilton.

CGI Federal is the main architect for the data hub with an $84 million contract to build the computing infrastructure for the government's eligibility database, Riley said. Booz Allen Hamilton will provide technical assistance, and Quality Software Services will offer system testing support.

In addition, Verizon's Terremark business will provide a cloud computing platform, and Acumen will work on the analytics component of the hub.

"There's this huge challenge for IT to be able to create this eligibility and enrollment for all of those [insurance exchanges]," Riley said.

Health Insurance Exchange Deadlines Challenging for States, IT Firms

Of senior health care professionals interviewed for a recent survey by software company Edifecs, 88 percent were concerned about disruptions to their current IT enrollment infrastructure and processes when they join an HIX.

The state HIXes will likely incorporate a way to link to electronic health records (EHRs) and health information exchanges (HIEs), according to Riley.

"Once you've created an HIX, you're going to have to connect with providers, EHRs, telemedicine and there needs be some sort of big data analytical package," Riley said. "The health plans are the ones that will need the EHR and telemedicine platforms," he explained.

Administrators of HIXes will determine eligibility based on data such as age and income, and they'll use data mining to produce reports at a state level, he said. They'll need the big data analytics to produce reports to keep Congress up-to-date on the status of the exchanges, Riley said.

Another vendor, Opera Solutions, is building a big data analytics platform for CMS that will detect insurance fraud in the exchanges.

In a response to the GAO report, the Department of Health and Human Services (HHS) said it expects the exchanges in all states to be up and running by Oct. 1.

For the IT vendors building the insurance exchanges for states, it's "all hands on deck" to meet the Oct. 1 deadline, said Kevin Walsh, a senior vice president and managing director for at Xerox's Government Healthcare Solutions group.

Xerox is working to build Nevada's health insurance marketplace, called HealthLink. Its team doesn't intend to get much rest this summer, Walsh told eWEEK in an email.

"We're working diligently to implement the Business Operations Solution, including the customer-facing Web portal, [to] go live on Oct. 1—that's when we'll fully launch open enrollment in Nevada—but it's a compressed time frame."

Xerox has hired contractors, and employees are working long hours to develop the IT infrastructure for the Web-based exchanges, he said.

"Health care reform is a massive transformation and standardization effort, and the pace is pretty daunting," Walsh continued. "There are going to be obstacles and unknowns. Any technology vendor who meets with success will be prepared to accommodate the unknowns either through rapid system corrections or manual workarounds."

Some systems that usually take two to three years to build will be constructed in less than a year, he noted.

"They will have challenges—but you have to be sure you have the trained staff and supporting processes to work around those challenges," Walsh said. "That's what we're doing to make sure Nevada HealthLink is robust, easy to use and on time."

Kansas and New York are two of the states furthest along in setting up HIXes for Oct. 1, according to Frost & Sullivan's Riley.

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