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Hash Elaborates on Exchange Effort at Bipartisan Policy Center

By John Reichard, CQ HealthBeat Editor

July 30, 2012 -- Michael Hash, the top Centers for Medicare and Medicaid Services (CMS) official in charge of implementing health insurance exchanges, elaborated on that effort Monday, telling a Washington, D.C., forum that within a few weeks virtually all states will be getting money to set up the new marketplaces.

Hash addressed a meeting sponsored by the Bipartisan Policy Center on the health care law; the center also announced a new effort to control health care costs. Former Senate Majority Leader Democrat Tom Daschle, who co-chairs the Center along with former Senate Majority Leader Republican Bill Frist, called the new project “an urgent and absolutely essential endeavor.” Daschle said that “bending the health care cost curve will require leaders from all sectors of the health care marketplace to come together.”

Hash expanded on remarks he made last week outlining federal progress toward establishing insurance exchanges. Thirty-five states have grants to establish an exchange and another nine applied for those funds at the end of June. “We’re expecting to announce awards for those establishment grants sometime in August,” he added. That means that only a handful of states aren’t at least beginning the process of setting up exchanges, even though a slight majority of state governors are opposed to the health care law (PL 111-148, PL 111-152).

Hash said that 19 states now have authority either through legislation or an executive order to operate a state-based exchange.

One of the most complex challenges for states that want to set up their own exchanges is information technology. “States are moving forward aggressively concerning their IT build,” Hash asserted, although he did not specify how many states are doing so. “At CMS our information technology team has been busy supporting a number of states who are on track,. . .building the infrastructure for the state-based exchange.”
Hash, who serves as interim director of the CMS Center for Consumer Information and Insurance Oversight, said his staff has been conducting “planning, design, and implementation” reviews of states as they go about the work of creating the marketplaces.

The CMS reviews allow “for a kind of dialogue and mutual feedback about the status of each state-based exchange and ultimately will facilitate the approval process,” he said. Twenty-three states have completed their planning review, six states have completed their design review “and we have another six states that are scheduled for design review over the next several months.”

CMS is “engaging states in what we refer to as user groups, which are technical assistance work groups to hammer out issues across the exchanges including eligibility and enrollment activities, plan management, outreach and consumer education,” Hash added.

To obtain CMS approval for an exchange states must file a “blueprint” — and more are interested in doing so since the Supreme Court issued its June 28 ruling upholding most of the law as constitutional, he suggested. After releasing last May a draft of the blueprint states must file to apply for approval, CMS launched webinars to educate them about what their applications should include. Since the Supreme Court rules, CMS has begun hosting “jump-start” webinars “for states that are now fully engaged in building a state-based exchange,” he said.

States that won’t be ready to run their own exchanges will rely on a “federally facilitated exchange.” Hash repeated his prediction of last week that the federal exchange will be ready by next October.

“We have a prime contractor that’s already building our IT infrastructure and we’re deep in the design for those business processes,” he said. Those processes cover the major operational functions for an exchange—“plan management, eligibility and enrollment, consumer assistance, calculation of tax credits and cost sharing reductions, and financial management functions.”

Hash said “we are already beginning to test some pieces of the infrastructure with the states and with insurance carriers, and so we are obviously moving ahead on that front.”

Hash said an interagency committee is at work on issues relating to the federal data hub, which establishes eligibility for subsidies to buy insurance and determines the amount. “This group is now meeting regularly to establish the governance structure, the hours of operation and the IT policies of the federal hub and working with others to make sure that there’s a connection with each and every new marketplace,” Hash said.

He added that CMS is building an actuarial value calculator that will determine what percentage a health plan pays of the costs of health care services for a given population. Plans must cover a fixed percentage of costs to be offered on an exchange. The calculator will make it easier for states to calculate actuarial value of health plans,” he said.

Hash has been named interim director of CCIIO pending a search for a permanent leader. But he said in an interview after his remarks that he wants to stay on the job. “It’s a good group of people,” he said. “Hard working. You know it’s an exciting time. As an old guy who’s waited a long time to see something like this it’s pretty gratifying.” Asked how long he’ll serve in the post he said “I don’t. As long as the secretary [Health and Human Services Secretary Kathleen Sebelius] wants me.”

Daschle said in his remarks that now that the Supreme Court has ruled, “we have the opportunity now to move the law forward but if we do it will require working across the political aisle.”

The new cost control program will enlist the efforts of former Congressional Budget Office Director Alice M. Rivlin and former Sen. Pete V. Domenici, R-N.M. who already head a deficit reduction task force for the Bipartisan Policy Center.

The pair “will seek strategies to promote rational, competitive, accessible and affordable health care programs,” Daschle said.

John Reichard can be reached at [email protected].

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