We Attend SERFF Meetings…So You Don’t Have To!

The hotel ballroom was packed – standing room only – but it wasn’t a private screening of The Twilight Saga: Breaking Dawn that had people so excited. SERFF – the System for Electronic Rate and Form Filing, operated by the NAIC – held the most recent of a series of day-long forums on health insurance exchanges yesterday.  (The audience, made up of insurers, state insurance regulators, officials from CCIIO, consumer representatives, and the media, was on the edge of their seats to get the latest intel about what needs to happen to get the health exchanges up and running. With less than a year to go, and with insurers preparing to apply for exchange certification in just a few short months, everyone was anxious for reassurance that we can get this done in time.

CCIIO provided an update on how plan management – the certification and oversight of qualified health plans in the exchanges – is going to work for the federally facilitated exchanges (FFEs), as well as what kind of coordination will be needed between the feds and the states for state based exchanges (SBEs) and partnership exchanges (P-FFEs). (For the latest update on where states are at with their decision-making, check out CHIR’s regular Exchange Roundup blog).

We also heard from SERFF staff, who are developing the information and data collection infrastructure for health plans to submit their benefits and rates to state and federal regulators for review and admission to the exchanges. During the meeting, there was extensive dialogue with both state regulators and insurers about the challenges they’re facing to meet exchange-related deadlines. While much of the discussion was highly technical, I’ve summarized a few top takeaways here:

CCIIO Update

  • Data collection templates for insurers wishing to participate in FFE (and possibly SBE, if the state chooses): On November 20, CCIIO released what they call a “PRA Package” or Paperwork Reduction Act Package, which is bureaucratic jargon for the data collection templates that insurers will need to fill out when they apply to participate on the FFE. The templates collect information on benefits, cost-sharing, networks, licensure, actuarial value, rates, and service area. CCIIO officials strongly encouraged SBEs to use the same templates, although they’re not required to do so. This is in part because the feds will use the data not just to certify health plans, but also to run the risk adjustment and reinsurance programs, determine cost-sharing subsidies, and assess compliance with the ACA’s market wide reforms. If all states, not just FFE states, are collecting the same data in the same format, it makes things easier for insurers and regulators.
  • Database for insurers wishing to participate in FFE and SBE: CCIIO also clarified that insurers in SBE states would submit their data through SERFF, as would insurers in P-FFE states. However, insurers in FFE states will need to submit their information through a different, federal system called HIOS (Health Insurance Oversight System), for at least the first year. This means that insurers in those states will likely have to submit their rates and forms for traditional state reviews through SERFF and their exchange applications through HIOS. CCIIO hopes to use SERFF for FFEs in later years. CCIIO did not say why they are using HIOS for the first year, but some audience members speculated it was because of concerns that the SERFF system would not be ready in time.
  • Anticipated timing: CCIIO hopes to have the templates finalized for use by mid-January 2013. They also anticipate, although couldn’t promise, that the proposed rules on essential health benefits and market-wide insurance reforms, would be final by “late winter.” And insurers should be able to start uploading their data into SERFF by March 28, 2013, to align with the CCIIO’s expected date for filing applications with the FFE.
  • The new rules on rate review: CCIIO also provided an overview of their proposed rule, released last week, revising rate review requirements. Notably, to maintain status as an “Effective Rate Review” state, insurance departments will need to incorporate a review of compliance with the ACA’s 2014 market reform into their traditional review of insurers’ rate increases. In addition, CCIIO is extending rate filing requirements to ALL rate increases, not just those over 10%. In other words, if an insurer wants to increase rates at all, they must submit a justification form to both CCIIO and the relevant state insurance department. These new requirements apply to individual and small group market insurers, both inside and outside the exchanges.

SERFF Update

  • How SERFF and CCIIO are coordinating: SERFF has been working closely with CCIIO, so that they can leverage the federal data templates in the SERFF system. This means that insurers can fill out the federal HIOS templates and upload them into SERFF to satisfy the data collection requirements. SERFF has built its system, however, so that states can add additional information collection requirements if they choose to.
  • Dealing with duplicative data: SERFF staff also noted that some states may be requiring data submissions that will become redundant, because the federal templates will collect the same data. They encouraged states to discontinue requiring those submissions.
  • Harmonizing SERFF and HIOS: SERFF staff are trying to minimize the differences between their requirements and HIOS, so that insurers aren’t working with two vastly different systems.
  • Coordination will be critical (do you sense a theme?): SERFF noted that in many states, the Department of Insurance, the exchange, and the federal government will share some plan management responsibilities, presenting a considerable coordination challenge and potentially causing some confusion. As one SERFF staff member noted: “This is pretty scary. There are so many different entities that have to come together and everyone has to get their piece done for it to work.”

Consumer Complaints

While SERFF is not building a consumer complaint mechanism into its system, they have been facilitating an effort to ensure that consumers’ concerns are routed to the appropriate entity, responded to, and tracked for oversight purposes. This is another area where multiple regulators, multiple entry points, and regulatory confusion could harm consumers and leave regulators without the information they need to effectively police insurers. Federal and state regulators are working together to help ensure that consumer complaints are appropriately handled, and that there is an infrastructure in place for regulators to share information and identify and respond to emerging problems or trends.

The forum wrapped up with a presentation by three states each operating a different type of Exchange (SBE, Partnership, FFE).  While there were quite a few differences among the three different models, there were similarities in the work that needed to be done, including form and rate review, complaint systems, and stakeholder outreach.

Throughout the meeting, insurers expressed concern that they will be required to fill out multiple forms and submit them to different entities at the state and federal levels. Many insurers at the meeting expected they would need to hire “an army” of people to do data entry for them, at least in this first year of plan certification. And everyone was worried about the slow pace at which they are getting information from the feds, and the tight time frame for implementation.

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However, some state regulators noted that insurers are already starting to winnow their product offerings to a more manageable number (currently, in some states, thousands of products, with little meaningful difference between them, are marketed and sold). This trend could accelerate as insurers’ products receive a heightened level of regulatory scrutiny.  In the end, that could help simplify the process of choosing a plan for consumers.

Stay tuned to CHIRblog for updates on health insurance exchange development and implementation.

The opinions expressed here are solely those of the individual blog post authors and do not represent the views of Georgetown University, the Center on Health Insurance Reforms, any organization that the author is affiliated with, or the opinions of any other author who publishes on this blog.