By Sabrina Corlette and Sandy Ahn
The administration recently published the results of its first compliance review of health plans participating in the health insurance marketplaces created under the Affordable Care Act (ACA). All in all, the report doesn’t tell us whether plans are actually complying with the new standards required by the ACA, but it does suggest that many struggled in 2014 to keep up with the operational demands of implementing the market reforms.
Specifically, the compliance review focuses on whether marketplace insurers had policies and procedures in place to address key functions like enrollment, monitoring network adequacy standards, termination of coverage and oversight of agent and broker compliance. The review also conducted operational testing on whether insurers were meeting FFM standards. For example, under the monitoring of network adequacy, the review verified whether insurers had policies and procedures in place to ensure that consumers needing access to out-of-network providers were able to do so. They also examined the frequency and accuracy of updates to provider directories.
The review found “many areas” in which insurers didn’t have the necessary policies or procedures, the policies were incomplete, or were not in effect. This information is not terribly surprising. During the first year of enrollment in 2014, many participating insurers were drinking from the proverbial fire hose – sprinting to keep up with evolving federal rules and guidance while at the same time enrolling and serving thousands of new customers. CCIIO, the agency responsible for oversight of the ACA’s market reforms, rightly followed a “good faith compliance” policy for insurers in 2014 and 2015. So long as insurers demonstrated good faith efforts to follow the law, CCIIO did not impose penalties or fines for non-compliance.
However, the good faith compliance stance expired in December 2015, so insurers may begin facing actual fines if they don’t meet the standards. But how best to assess whether insurers are behaving badly?
Examining policies and procedures, as CCIIO is doing through its compliance reviews, can play an important role in documenting and communicating policy, and assisting with training. However, policies and procedures do not reveal actual insurer behavior and whether their behavior is compliant with regulatory standards.
Instead, as we propose in a recent white paper, federal and state regulators should be looking at data reflecting actual consumer experience. Doing so is a critically important way to reveal how insurers are behaving. Specifically, so-called “big data” (also referred to as transactional data) can be a powerful and efficient tool to monitor how insurers are marketing their products to consumers and how consumers are using and paying for health care services.
The ACA envisioned that state and federal regulators would make effective use of data by requiring marketplace insurers to submit information on a wide range of practices, from claims payment to enrollment and disenrollment to benefit and network design. If regulators were collecting and analyzing claims and other, transaction-level data, we might be better able to answer important questions such as:
1) Who is enrolling in marketplace plans through special enrollment periods (SEPs) and why? What are their relative claims experiences (i.e., are people who lose a job or move to a new state more likely to have high claims costs than someone who has a baby or gets married)?
2) Who is dis-enrolling mid-year from marketplace plans and why?
3) Are insurers that have eliminated broker commissions for certain metal level plans, such as gold and platinum-level plans, enrolling fewer people with certain diagnoses, such as cancer, diabetes, or mental health disorders, than carriers that have not done so?
4) When it comes to networks, are people enrolled in narrow network plans more likely to need care from out-of-network providers than those enrolled in broader network plans? High out-of-network claims for a particular covered medical service may signal that a network may not be providing reasonable access or that a closer look at that health plan’s network is needed.
Unfortunately, the administration has continually delayed the implementation of these provisions and as we discuss in this blog here, has only taken “baby steps” so far in what it will require insurers to submit. Using a big data approach to monitoring and compliance, however, has the potential for big rewards – the ability to monitor and address insurer behavior in real time and monitor compliance much more effectively than looking at policies and procedures.