5 IT Tips For State Health Insurance Exchanges

States confront huge technology challenges and opportunities with federally mandated HIXs. A new report offers guidance to ease the transition.
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Building health insurance exchange (HIX) websites where millions of small businesses and individuals can enroll in health plans promises to be one of the most time-consuming IT infrastructure endeavors that states have confronted in recent years. So says a new report from the University of Massachusetts Medical School (UMMS).

Not only will health plans have to link their systems to these exchanges, but linking exchange technology with individual eligibility and enrollment data at Medicaid, the Children's Health Insurance Program (CHIP), and other federal government databases will create new opportunities to upgrade or replace systems. That, however, increases the scope and complexity of the work ahead, the report said.

Establishing the Technology Infrastructure for Health Insurance Exchanges Under the Affordable Care Act (ACA), developed in collaboration with the National Academy of Social Insurance, is based on interviews with policy and technology leaders from the "early innovator" states that are developing HIX IT models that can be adopted and tailored by other states. Executives at other state exchanges that have made significant progress in designing and developing exchanges, and others that are modernizing Medicaid and CHIP eligibility systems, were also interviewed.

Earlier this year the federal government announced it had disbursed more than $1 billion to develop state HIXs. In August the U.S. Department of Health and Human Services announced another $765 million in grant money to help states conduct major upgrades to their legacy IT systems.

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Part of the process of integrating systems, the report notes, requires states to "rely heavily on the federal data service hub (DSH) to obtain access to key functions and connectivity to federal data sources that will verify citizenship, immigration status, and tax information."

To successfully achieve these goals, states and the federal government must collaborate on DSH technical requirements and allow for transparency in business processes and data collection.

Dr. Jay Himmelstein, professor in the department of family medicine and community health at UMMS and co-author of the report, told InformationWeek Healthcare: "The state-based health insurance exchanges will need to connect to a federal data service hub to confirm income and citizenship, and this functionality will require new systems to be built, as well as major upgrades to the current federal systems."

According to Himmelstein and his colleagues, states have some flexibility to help them implement their exchanges. These options include (1) establishing and operating their own state-based exchange (SBE); (2) operating an exchange in partnership with the federal government (partnership exchange); or (3) defaulting to a federally facilitated exchange (FFE) run by the federal government.

Himmelstein, who is also a senior advisor in the Office of Health Policy and Technology, which is part of the UMMS's Center for Health Policy and Research, said there's not enough time or money for states to fully custom-build a system for themselves. Time constraints, Himmelstein said, threaten the ability of states to meet the summer 2013 deadline, at which point IT systems that determine an individual's eligibility for health coverage must be operational and fully tested. The other looming deadline is January 1, 2014, when state exchanges must be fully operational.

"There does come a point at which no amount of reuse or resources--whether human or fiscal--will enable the establishment of an SBE or ACA-compliant Medicaid and CHIP eligibility systems for 2014, given the timelines for procurement and development," the report said.

Based on interviews with policy and technology leaders, the authors developed five recommendations for state exchanges to follow:

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