Divining the future of insurance exchanges
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Most states are working to build exchanges, some more quickly than others

While the majority of states are moving forward to establish affordable insurance exchanges as required by the Patient Protection and Affordable Care Act (ACA), how these exchanges will work and what impact they will have on dermatology remains unclear.

State-based exchanges are expected to provide individuals and small businesses with marketplaces to find, compare, and purchase health insurance. According to the Congressional Budget Office (CBO), the increased competition combined with streamlined administrative costs should reduce average insurance premiums by 7 to 10 percent.

State roundup

As part of the roll out of the ACA, the Department of Health and Human Services (HHS) has been providing funding for states to build exchanges for the past two years. State governments apply for the funding through planning, establishment, and early innovator grants. In 2010, 49 states and the District of Columbia received exchange planning grants totaling more than $54 million. The following year, seven states received more than $249 million in early innovator grants for demonstrating leadership in developing cutting-edge and cost-effective consumer-based information technologies and models for eligibility and enrollment. To date, 34 states and D.C. have received more than $856 million in establishment grants. States can apply for these grants through the end of 2014 and use the funding beyond that date as they continue to establish exchanges. [pagebreak]

As of June, more than 40 states and D.C. have introduced legislation to establish exchanges. One-quarter of them have enacted such bills into law. Approximately half the states across the country have pending legislation, including several bills that have been introduced this year after previous bills failed in 2011. Other states, such as Rhode Island and New York, have established exchanges through executive order. A handful of others, all led by Republican governors opposed to the federal reform effort (including Florida, Wisconsin, and Louisiana), will not implement exchanges, leaving the task to the federal government. Federally facilitated exchanges will be comparable to state-based exchanges; the primary difference will be that HHS can charge the state to operate the exchange. States also have the option of developing partnerships with HHS to operate an exchange.

Once the Supreme Court upheld the ACA, many states that had opposed the reform law in court and had been slow in implementing the exchanges were forced to pick up the pace to meet impending deadlines. Legislators and regulators in some of these states appear to be reluctantly pursuing exchanges while keeping an eye on the outcome of the November election and the possibility that, if Republicans emerge victorious, the ACA might be repealed. Even local politics play a role as some states brace for potential changes in their respective legislative leadership this fall. [pagebreak]

Getting looped in

To date, physicians in general, and dermatologists in particular, are not getting a substantial amount of information concerning the development of exchanges in their respective states. “We’re getting very general information,” said Bruce Brod, MD, chair of the AADA’s State Policy Committee, speaking of his home state of Pennsylvania, which was among a group of states that challenged the ACA.

“We haven’t received any communication and we have no representation at the state level,” echoed Mary Finnegan, MD, president of the Nebraska Dermatology Society. Like Pennsylvania, Nebraska was one of approximately 15 states that had been waiting for the Supreme Court’s ruling. However, both states have received planning grant monies and are moving forward to build exchanges.

In contrast, local physician associations have been actively monitoring the creation of an exchange in Missouri, according to Kimberly Cayce, MD, president of the Missouri Dermatological Society. In fact, the society has contracted lobbyists to report on the progress and provisions of the state-based exchange. Legislation to establish an exchange nearly passed in 2011, she explained. But in 2012, the Republican-led legislature passed a bill that includes a measure aimed at limiting the Democratic governor’s administration from implementing an exchange without legislative approval. The public will be asked to vote on this measure in the November election. “Dermatologists will certainly have a seat at the table if a plan for a health insurance exchange is rolled out,” Dr. Cayce said. [pagebreak]

Until now, much of the progress made with establishing the Colorado Health Benefit Exchange (COHBE) has focused on information technology and administrative issues, said Chet Seward, senior director of health care policy for the Colorado Medical Society. While the society is monitoring that work, it will become more engaged once the COHBE begins to work on the health benefits package. (See sidebar.)

More patients

What can be said with certainty is that once the exchanges go live on Jan. 1, 2014, dermatologists can expect to see more patientsa lot more patients. As many as 30 million Americans are expected to gain insurance coverage through the exchanges by 2016, according to CBO estimates.

Meeting this increased demand will pose a challenge for dermatologists who are already overburdened, Dr. Brod said. In Pennsylvania, the Department of Insurance estimates that up to 2.2 million state residents could potentially enter into the system through the exchange. That doesn’t include individuals who are newly eligible for Medicaid and the Children’s Health Insurance Program, both of which are expanded under the ACA. Dermatologists will have to look to creative solutions, such as more efficient patient triaging, to meet the demand, he said. [pagebreak]

“We have to train more doctors and nurses to practice in rural areas,” Dr. Cayce said. Additionally, she suggested that telemedicine and other technological advancements that increase efficiency at a lower cost should be utilized. In Missouri, an estimated 835,000 of the state’s residents (approximately 14 percent) are uninsured. “As we advance with health reform initiatives, it’s critical that we do what is best for patients and do not sacrifice quality for access,” she said. “We cannot use a completely economic, free-market philosophy in health care because freedom to fail translates to the life of a patient.”

Similarly, the Colorado Medical Society maintains that payment reform and delivery system redesign must occur to accommodate the increased demand. One example of the latter is the development of medical neighborhoods that more efficiently connect specialists with primary care physicians. “There just aren’t enough physicians in Colorado to see these patients,” Seward said. “Our push now is to improve the efficiency and effectiveness of existing practices so they can care for as many patients as possible.” [pagebreak]

Extender use

With dermatologists already in short supply, the increased demands for care could prompt greater reliance on physician extenders. Dermatologists who hire mid-level providers will have to make sure that they provide the appropriate education and supervision, Dr. Brod said, adding, “Dermatologists will have to make sure that they remain the leaders in the dermatology team.”

In Nebraska, the majority of dermatology practices already employ physician assistants, a scenario that will likely need to increase, Dr. Finnegan said. An estimated 237,000 of the state’s residents (13 percent) are uninsured. But that could also set the stage for potential scope-of-practice conflicts. “Some physician extenders are leaving dermatology practices and going to family practices and practicing under the umbrella of dermatology,” she said, “even though they are not being supervised by a dermatologist.” She said a PA in Grand Island, Neb., left a dermatology practice for family practice but advertises in the local paper as a dermatology provider.

The Colorado Medical Society will be carefully watching workforce issues, such as the use of mid-level providers, as they unfold, Seward said. The society does anticipate scope-of-practice issues coming up because of the expansion of coverage. An anticipated 510,000 Coloradans are predicted to be insured in 2016 through the COHBE. [pagebreak]

Other concerns

Dr. Brod raised other concerns that dermatologists should watch for as the exchanges unfold. For example, prescription medications and laboratory services are two of the benefits that state exchanges must provide. Will exchanges have formularies that restrict which medications dermatologists can prescribe? Will dermatologists be forced to use a specific lab service? “We don’t know the answer to these questions, but we need to be vigilant for them in order to be able to provide the best care for our patients,” he said. “We want to make sure that they are getting the drugs we want them to and that the pathology is read by a dermatopathologist of our choosing.” (See the next article, “In the spotlight,” for more discussion of dermatopathology.)

Additionally, HHS has recommended that exchanges initiate a physician quality rating system for consumers, Dr. Brod noted. “Those rating systems must be fair and transparent and have an appeals process,” he said. “We don’t want to be rated on meaningless criteria.” Along those lines, he said, other questions include, will physicians have to meet quality measures? And if so, how are these determined and by whom?

While dermatologists adopt a wait-and-see approach, state governments are gearing up for upcoming deadlines. On Nov. 16, states must submit proposals showing how they intend to operate their respective exchanges. On Jan. 1, 2013, states must demonstrate sufficient progress toward setting up their respective exchanges or face the federal government implementing one. With voters deciding on legislative approval for establishing an exchange, it’s unlikely that Missouri will be able to meet the November deadline, Dr. Cayce said. In Colorado, which passed bipartisan legislation to establish a state exchange in 2011, the COHBE is moving full speed ahead, Seward said. Colorado is one of a handful of states that expects its exchange to be open for business in October 2013, with benefits from plans sold starting in January 2014. But all that could change if the legislative leadership changes after local elections. “The political cycle bears watching because nobody knows what will happen,” he added. [pagebreak]

Resources for coping with reform available

While the Affordable Care Act is an issue in the November election, implementation of the law continues in the meantime. Dermatologists looking for information about how the law will affect them, their practices, and their patients can turn to the Academy’s website and Dermatology World. The Health System Reform Resource Center, at www.aad.org/hsr-resource, includes a timeline for implementation and information about key provisions of the law, including insurance exchanges. A special online supplement to Dermatology World, available at www.aad.org/dermatology-world/monthly-archives/2012/reform, packages all of the magazine’s articles about reform implementation and its impact on the specialty, including discussion of accountable care organizations (ACOs), the Independent Payment Advisory Board (IPAB), and the Physician Compare website. An article in next month’s Dermatology World will explore the impact the election will have on the law’s potential implementation or repeal.

Essential health benefits

State-based insurance exchanges are responsible for selecting health plans qualified to offer coverage. To ensure a more consistent level of health benefits across all exchanges, the Patient Protection and Affordable Care Act requires that plans cover a package of diagnostic, preventive, and therapeutic services and products that meets criteria established by HHS.

The essential health benefits include:

  1. Ambulatory patient services
  2. Emergency services
  3. Hospitalization
  4. Maternity and newborn care
  5. Mental health and substance use disorder services, including behavioral health treatment
  6. Prescription drugs
  7. Rehabilitative and habilitative [e.g., occupational therapy] services and devices
  8. Laboratory services
  9. Preventive, wellness, and chronic disease management
  10. Pediatric services, including oral and vision care

This list constitutes a minimum set of benefits that the plans must cover; qualified insurers may offer additional benefits.



Resources for coping with reform available
Essential health benefits
Resources for coping with reform available
Essential health benefits