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Managing risk vs managing uncertainties: RA in the ACA

Dennis Bolin, Member Engagement/Chief Marketing Officer, Health Plan Alliance

02/18/2016

Health Plan Alliance members manage risk.  It is our business.  And we are good at it.  What is challenging is when we take on risk in a market where uncertainty and variability make it nearly impossible to anticipate with reasonableness the level of risk.

That is the market we now find ourselves in under the Affordable Care Act and exchanges.  Historically, as regional health plans, Alliance members are committed to the individual and small group markets in our communities – this commitment is one of several factors that distinguish us from our national and larger regional competitors.   

But many Alliance members now find ourselves in a situation where we cannot reasonably anticipate risk in the individual and small group markets when setting our premiums and designing our benefit offerings.  Since CMS released its Risk Transfer Payment Report last summer Alliance members have been assessing the impact and our future strategies.  Teams from 26 health plans gathered along with industry experts in Albuquerque in late January to share analytical results, consider which levers are most likely to create positive results given the risk adjustment formula, evaluate best practices for engaging providers, and discuss investment priorities in infrastructure and people. Click here for the presentations and documents shared at the Value Visit (click on Documents tab).

By the end of our 3 days together we had reached several conclusions:

  1. We are committed to succeeding in the market created by ACA.  Expanding coverage is important to our customers and to our communities.
  2. Changes need to be made.  Some elements of ACA and the Risk Adjustment program are having consequences that run counter to the intentions of the Act.  
  3. We want competition.  We are well positioned in our markets to take advantage of expanded coverage.  
  4. It must be an equitable playing field.
  5. There are key elements that can be adjusted to meet the objectives of ACA and support an equitable dynamic market where regional plans can succeed and offer choice. market where regional plans can succeed and offer choice.

To deliver this message to CMS requires support from Congress.  So, 6 Alliance members joined efforts with the Hospital Health Plan coalition in conducting a briefing for Congressional staff on February 10.  Approximately 70 staffers showed up. Click here for a copy of the presentation.  In addition to discussion leaders Ken Lewis with HHP and Sean Mullin with Leavitt Partners, executives Health Plan Alliance members shared the value they bring to communities and the impact on their ability to meet the coverage needs of their members:

  • Sinead Madigan, Health Alliance Medical Plans
  • Rory Lafferty, Health Alliance Plan
  • Jim Kessler and Elin Gaynor, Health New England
  • John Tallent, Medical Associates Clinic & Health Plans
  • Dr. Mary Davis, Network Health Plan
  • Mike Huotari, Rocky Mountain Health Plan

The message to Congress is simple:  CMS should sit down with regional health plans and discuss the issues and impact of the current Risk Adjustment program.  Our concerns are:

  • TIMING - adjust the calendar so premium and benefit design decisions can be made on the most recent risk experience.  CMS’s timeline for Medicare Advantage permits this process – the ACA timeline should as well.
  • DATA INTEGRITY – The ACA process does not allow for adjustments to data once it is submitted.  There are numerous issues with submitting data via Edge Servers and plans cannot appeal once the data is submitted.  Medicare Advantage allows data to be corrected; we are asking the same under ACA.
  • METHODOLOGY – The process which was intended to stabilize the market is, instead, creating uncertainty and variability.  Benchmarking should benefit the consumer, not shift significant dollars from one carrier to another and create unpredictable premiums or drive carriers from the market.

​What can you do immediately?  
HHP and Leavitt Partners are both continuing to engage with Alliance members on these issues. Ask your Congressional representatives to sign on to the letter co-sponsored by Representative Bob Gibbs (R-OH) and Ron Kind (D-WI). Click here for a copy of the letter. You should encourage your representative to notify these two offices to sign onto the letter.

While the Alliance does not directly do advocacy work, we will continue to work with our industry partners to ensure Alliance members are aware of developments. As important, Alliance members will continue to share information and best practices.

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