MARYLAND HEALTH BENEFIT EXCHANGE Level Two Establishment Grant Application II. PROJECT NARRATIVE

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1 MARYLAND HEALTH BENEFIT EXCHANGE Level Two Establishment Grant Application II. PROJECT NARRATIVE A. DEMONSTRATION OF PAST PROGRESS The coordinated and sustained efforts of the State of Maryland and the Maryland Health Benefit Exchange (Exchange) have been unwavering since President Barack Obama signed the Affordable Care Act (ACA) in The Exchange, in partnership with other state agencies, has made significant progress toward making health care reform in Maryland a success and remains committed to increasing access to affordable, quality care and improving the health of all Marylanders. Funding made available through Early Innovator, Planning and Level One Establishment grants enabled the Exchange to conduct market research; develop and establish a governance structure; procure and begin development for a new enrollment and eligibility system to support Maryland s no wrong door approach in conjunction with Maryland s Medicaid agency and the Maryland Department of Human Resources (DHR); hire the Exchange executive staff, including an Executive Director and four directors; and engage expert consultants and stakeholder advisory groups to conduct legislatively-mandated studies on policy decisions to shape further development of the Exchange. From its inception, the Exchange has engaged stakeholders in a transparent and inclusive process that has included other state agencies, health insurers, insurance brokers, safety net providers, community-based organizations, advocates, consumers, providers, business leaders, unions and industry experts to ensure that policy and implementation decisions are aligned with the needs of Marylanders. The Exchange has taken measured steps to meet federal certification requirements in all eleven core areas by January 1, i. Background Research The Exchange is committed to a data-driven process to support the policy and planning decisions necessary for the establishment of an exchange in Maryland. The state has a long history of data collection and analyses with many agencies and programs contributing to the background research necessary to fully understand the complexities of the Maryland market. The Maryland Health Care Commission (MHCC) collects and analyzes data on Maryland health care expenditures and coverage; the Maryland Insurance Administration (MIA) has detailed information on Maryland s insurance markets; and the Maryland Medicaid program routinely analyzes eligibility, paid claims, managed care organization (MCO) encounters and other data for rate setting, enrollment forecasts, budget projections and quality monitoring purposes. All together, these agencies have a long track record of data collection and analysis. The MHCC publishes Health Insurance Coverage in Maryland biennially. 1 This report analyzes Current Population Survey data to provide insight on Maryland s uninsured and includes information on age, income, employment, race, education and citizenship. The report found that 720,000 Marylanders -- approximately 13% of Maryland s population, was uninsured in , the most recent time period for which data are available. This rate, 14.5%, is slightly higher for the State s population under age 65. Maryland compares favorably to the national uninsured rate, which is 17% for the overall population and 19% for the population under age The MIA receives comprehensive data from health insurers. Although the small group market has 14 carriers and the individual market has 9 carriers actively selling policies in Maryland, the State s health insurance market is highly concentrated. As of December 2011, there were 321,421 covered lives in the small group market and about 131,292 in the individual market. [3] One holding company (three health insurers) accounts for 77% of the small group market and three holding companies (nine health insurers) represent nearly 95% of covered lives. In the individual market, one holding company (three health insurers) has almost 94% of covered lives and three holding companies (seven health insurers) account for 99% of the individual market. Across all markets, six holding companies and their respective health insurers account for about 99% of the market Page 1

2 Building upon the data available from the MHCC, MIA and Medicaid, the Exchange was able to baseline the uninsured population in the state and carrier participation in the market. In 2012, the Exchange awarded a contract to The Hilltop Institute, at the University of Maryland Baltimore County, to create a model that estimates enrollment in the Exchange and the economic impact to the State; this model may be modified to reflect changing market conditions and will be used on an ongoing basis. In 2011, The Hilltop Institute established a methodology to estimate the projected enrollment split between Medicaid and the Exchange and was included in the Level One Establishment grant. Recognizing that the policy decisions regarding operations of the Exchange were too complex to be adequately addressed during the first year of planning, state officials set forth a process in the Maryland Health Benefit Exchange Act of 2011 that required the Exchange to conduct studies of six policy issues and to create four advisory committees to provide stakeholder input into these studies. The advisory committees met statewide throughout the fall of 2011 and included 66 diverse stakeholders representing industry and community organizations. 3 Consultants facilitated a series of sessions for each of the four advisory committees during which a structured process resulted in the development of six reports that analyzed policy options for the Exchange Board to consider. The reports were presented during public meetings with opportunities for comment and testimony. The findings were considered by the Board when preparing the policy brief that was delivered to Governor O Malley and the Maryland General Assembly on December 23, 2011 outlining the recommendations for a successful Exchange. 4 These recommendations were incorporated directly into the Maryland Health Benefit Exchange Act of 2012 (2012 bill) 5. Below is an overview of the studies and committees: 2011 Exchange Policy Workgroups Advisory Committee Navigator and Enrollment Advisory Committee Consultant and Report Manatt Health Solutions: Study of Navigator Program and Consumer Assistance Question Addressed by Committees How should the navigator program(s) be established? Key Considerations The needs of Maryland s individual and small group markets are very different. The state has a strong broker community that provides consumer assistance to over 90 % of the small group market. Brokers also provide services to 40-50% of the individual market. Maryland also has a strong network of support to assist uninsured individuals in obtaining public insurance coverage. State and local agencies, community-based organizations and safety net providers assist individuals with enrollment in public programs. These agencies conduct outreach and education, provide enrollment support and target vulnerably populations. 3 Chapters 1 and 2 of the Acts of the Maryland General Assembly of The Maryland Health Benefit Exchange Act of Recommendations for a Successful Maryland Health Benefit Exchange can be found at 5 Chapter 152 of the Acts of the Maryland General Assembly of the Maryland Health Benefit Exchange Act of 2012 Page 2

3 Weber Shandwick: Study of Advertising and Market Analysis How should the advertising/outreach campaign should be developed? The success, viability and affordability of the Exchange depend on having robust enrollment in the Exchange. A comprehensive, wide-ranging mass-media marketing campaign is needed to create awareness of the Exchange. A comprehensive, wide-reaching mass media campaign is necessary to dispel myths and change perception about health care so that people enroll. Small Business Options Program (SHOP) Advisory Committee Institute for Health Policy Solutions: Analysis of Key Maryland SHOP- Related Policy Options How will the SHOP be designed and established? Maryland has a strong broker and Third Party Administrator (TPA) market that remains very interested in partnering with the Exchange. Additionally, small businesses in Maryland rely on TPAs to manage additional benefits such as COBRA and life insurance. A strong partnership with both TPAs and brokers will substantially enhance the viability and effectiveness of the Exchange, particularly the SHOP. Operations and Insurance Rules Advisory Committee Wakely Consulting: Exchange Operating Model Report What purchasing model should the Exchange use? Maryland has a highly concentrated market with one carrier providing coverage for approximately 70% of each the individual and small group markets. There are less than eight carriers in each market and only two carriers that cross between Medicaid and commercial insurance. The risk mitigation strategies Maryland uses must take this level of concentration into consideration. Mercer Consulting: Report of Market Rules and Risk Selection for the State of Maryland How should the Exchange mitigate adverse selection? The impact on rates in the individual market could be significant in 2014 for several reasons. First, Maryland s current individual market is underwritten. Second, Maryland has a high risk pool of approximately 20,000 individuals with a loss ratio of 205% in the MHIP State program and a loss ratio of 571% in the MHIP Federal program. Mercer Consulting has estimated that with these high risk pool members entering the individual market, the premium increase could be as high as 40%. Maryland must address this potential rate shock in the individual market. Finance and Sustainability Advisory Committee Wakely Consulting: Financing the Exchange Report How will the exchange will be sustainable? The Exchange needs to have a financing mechanism that is sustainable and reliable. The Exchange will benefit all Marylanders. Page 3

4 ii. Stakeholder Consultation Maryland has demonstrated a steadfast commitment to implementing health care reform and establishing an Exchange through inclusive and sustained collaboration with all stakeholders. Immediately following passage of the ACA by President Obama, Governor O Malley signed an Executive Order in Maryland within 24 hours to establish the Health Care Reform Coordinating Council (HCRCC), a bi-partisan legislative and executive branch body charged with conducting a transparent and public process inclusive of a multitude of stakeholders. The Maryland Health Benefit Exchange Act of 2011 required the Exchange to establish four advisory committees (Navigator, SHOP, Finance and Sustainability and Operations and Market Rules) made up of a cross section of Marylanders to react to the options presented by consultants of the six studies mentioned earlier. The consultants were responsible for presenting the advisory committees with key factors for consideration. The advisory committees, designed as non-voting bodies to facilitate a collaborative process, were responsible for critically examining the options and analyses from a Maryland-specific perspective. In total, more than 66 Marylanders participated on the advisory committees. Each meeting was held in a public forum with additional stakeholders attending each meeting. A period was reserved at the end of each public meeting for discussion and testimony. The advisory committees met a total of 22 times between September and November A board liaison was assigned to each committee and the Executive Director attended each committee meeting with the board liaison to communicate back to the board and to ensure continuity between committees. The inclusive process resulted in the recommendations set forth in the report to Governor O Malley and the General Assembly dated December 23, 2011, and it has set a precedent for ongoing stakeholder engagement between the Exchange and the many critical partners with a stake in its success. Advisory Committee Membership by Affiliation (2011) Further evidence of stakeholder engagement was demonstrated during the 2012 legislative session s enactment of the Health Benefit Exchange Act of The Governor s Office of Health Care Reform (GOHCR) established a process through which stakeholders could offer amendments, and feedback from all interested stakeholders could be incorporated into the Exchange bill. The team, led by Lieutenant Governor Anthony Brown and Department of Health and Mental Hygiene (DHMH) Secretary Joshua Sharfstein, M.D., who also chairs the Board of Trustees of the Exchange, as well as the Director of the Office of Health Care Reform and the Executive Director of the Exchange, held three public meetings with interested stakeholders to address concerns and discuss amendments to the bills. All amendments were provided to the GOHCR for review and consideration. The team met internally with each specific stakeholder group to determine the disposition of each amendment submitted and the decisions were shared in an open forum with the public. This process resulted in broad consensus and support for a law that truly reflects the needs of all Marylanders. Page 4

5 In early 2012, two additional stakeholder workgroups convened to assist in various policy, planning and implementation matters pertaining to the Exchange. The GOHCR created a Communications Advisory Committee in January 2012 which brings together external stakeholders including consumer advocacy, academic, community, health insurers, business and local government organizations. The Communications Advisory Committee meets monthly to discuss communications and outreach statewide, policy related matters, resources and future collaboration. Next, the Exchange Implementation Advisory Committee (EIAC) was formed by Exchange leadership in February 2012 to engage with industry partners on key plan management, operational and technical implementation points between the Exchange and carriers, third party administrators, cooperatives and managed care organizations. iii. State Legislative and Regulatory Actions The Maryland Health Benefit Exchange Act of 2011 established the legal authority to operate an exchange that complies with federal requirements and created the framework for the advisory committee and stakeholder engagement process. On May 2, 2012, Governor O Malley signed into law the Maryland Health Benefit Exchange Act of 2012 which furthers the establishment of the Exchange. It builds upon the success of the state s existing health insurance markets and puts in place policy recommendations developed by the Exchange board with the guidance of expert consultants and the Maryland stakeholder process. It continues the state s step-by-step approach to development of the Exchange, ensuring that Maryland stays on track to meet federal deadlines and remains a national leader in bringing Marylanders the full benefit of federal health care reform through effective and deliberate implementation of the ACA. Specifically, the Health Benefit Exchange Act of 2012 defines the following aspects of the Exchange: Area Operating Model Market Rules SHOP Navigator Programs Financing Essential Health Benefits (EHBs) Risk Adjustment and Reinsurance Fraud, Waste & Abuse Dental & Vision 2012 Bill Allows the Exchange to set QHP requirements that go beyond ACA defined requirements Requires carriers with over $20M in premium revenue in the small group, and $10M in individual, to participate inside the Exchange; requires any carrier offering a catastrophic plan to participate inside the Exchange Establishes a SHOP exchange that is distinct from the individual exchange; limits enrollment to employers with less than 50 employees (through 2016); allows for employee choice as defined by ACA as well as current market model Creates separate programs for SHOP/individual; allows brokers to continue to sell in the exchange with authorization but without becoming navigators; requires certification for navigators and authorization for navigator entities; defines oversight relationship between Exchange, MIA and DHMH to ensure all programs are addressed and coordinated Creates a joint legislative / executive committee to conduct a further study of specific financing mechanisms to determine the most appropriate and effective option; report is due to General Assembly on 12/1/12; ultimate decision on financing to be determined during the 2013 General Assembly Defines Health Care Reform Coordinating Council (HCRCC) as body to determine benchmark plan through public stakeholder process Requires Exchange to strongly consider using the federal risk adjustment model initially and then to conduct a study to determine whether a different model would be more effective Requires the Exchange to establish and report to the General Assembly its plan for a fraud, waste and abuse prevention program Allows the Exchange to offer optional dental and vision plans; specifically states the Exchange cannot offer anything outside of medical, dental and vision iv. Governance As defined in the 2011 legislation, the Exchange is governed by a nine-member Board of Trustees, including the Secretary of Health, the Maryland Insurance Commissioner and the Executive Director of the (MHCC). The remaining six members were appointed by Governor Martin O Malley; three members represent employer and consumer interests, and three members bring health care experience to the board, and all were confirmed with the advice and consent of the Senate and General Assembly. Governor O Malley s appointments to the Exchange Board were announced on May 26, The board met for the first time on June 3, Page 5

6 The Exchange Board meets monthly or more often if necessary, in an open forum as required by Maryland s Open Meetings Act. All meeting materials, including agendas, presentations and handouts, are posted in advance on the Exchange stakeholder website as required in the bylaws, and minutes for all proceedings are available within a month upon approval of the Board. 6 An annual meeting of the Board is held in June each year and an annual report is published in December; the first annual report is due in v. Program Integration Ensuring a seamless and coordinated approach from planning through implementation has been a focal point for Maryland s leadership team since the ACA was enacted in Throughout the process, the goal has been to establish permanent structures that foster program integration, as well as cultivate a shared vision of information technology implementation. Within the past six months specifically, significant progress has been made as an inter-agency team has identified and defined coordinated business workflows. The structure of the HCRCC laid the early foundation for close program integration to ensure seamless eligibility and enrollment processes among State health and human service programs, and coordination on issues related to the regulation of insurance companies. In Maryland, Medicaid and the Children s Health Insurance Program (MCHP) are both housed within DHMH. The Secretaries of DHMH and DHR, as well as the Exchange Executive Director and the Commissioner of the MIA are all HCRCC members. The structure to support these partnerships is reinforced through the Exchange Board, whose members include the Secretary of DHMH and the Maryland Insurance Commissioner, as well as the Executive Director of the MHCC. In particular, the inclusion of the Secretary of DHMH and Insurance Commissioner as members of both the HCRCC and Exchange Board facilitates communication with MIA on many issues relevant to the Exchange, such as the financial stability and solvency of health insurers, certification of plans, premium rate and form review, state licensure of health insurers and brokers, and compliance with applicable federal and state laws in health insurers and brokers business practices. Equally important, the Secretary of Health ensures program integration on matters pertaining to navigator program 6 Page 6

7 development, Medicaid eligibility and enrollment, coordination with managed care organizations and compliance with applicable federal Medicaid requirements. The Secretaries of DHMH and DHR, as well as the Executive Director of the Exchange, personally have created an environment of intensive collaboration, with all three entities working together to develop a policy strategy as well as the systems and operational infrastructure necessary to achieve a no wrong door approach to eligibility and enrollment. A weekly or biweekly meeting is attended by the principals of all three organizations, as well as key staff members, to review the implementation progress of the enrollment and eligibility system. A governance structure has been established that incorporates all three agencies with representation at every decision level. As part of implementation activities, the Exchange has detailed specific functions required for operations and has worked with all pertinent state entities to determine which entities are currently performing particular functions, and where new functions must be created. For example, the MIA currently reviews health plan rates and benefits. The Exchange will look to the MIA to continue these functions in These detailed lists have served as a starting point for discussions with the MIA, DHMH and MHCC for final decisions on the allocation of responsibilities through Please see the Proposal to Meet Requirements for more details on this process. Interagency Governance Structure vi. Exchange IT Systems A key focus for Maryland has been the procurement of resources, tools and expertise necessary for creating a state-of-the-art technology infrastructure that supports Medicaid expansion and the establishment of an exchange. In May 2011, the Exchange procured a Program Management Office (PMO) to perform a variety of IT systems-related procurement and management functions. Immediately, the PMO began gathering requirements through joint application design (JAD) sessions with internal stakeholders at the DHR, DHMH, Exchange, MIA and the Department of Information Technology (DoIT), as well as with external partners including carriers, third-party administrators and brokers. The outputs from these sessions were business and functional requirements that were included in an IT vendor Request for Proposal (RFP) and will continue to be used throughout the design, development and implementation of the exchange. An overall IT strategy was developed that focused on replacing legacy enrollment and eligibility systems with commercial off-the-shelf (COTS) products that conforms to all federal and state standards. The strategy is configurable and scalable for changing requirements and can be potentially leveraged by other states in their exchange development programs. The Exchange awarded a contract to Noridian Administrative Services LLC (NAS) whose solution includes a combination of custom off-the-shelf (COTS) products from Exact, Curam and Connecture. Page 7

8 Throughout 2011 and to date in 2012, the Exchange successfully completed several milestone gate reviews in alignment with the CMS Investment Life Cycle (ILC) framework including the Architectural Review, Project Baseline Review (PBR) and Preliminary Detail Design Review (PDDR). These gate reviews included artifacts that were developed by the Exchange in order to document the progress that has been made in creating the IT infrastructure needed to implement the ACA. Additionally, the Exchange has mapped the ILC gate reviews with the newly adapted Enterprise Life Cycle (ELC) framework by CCIIO and completed the Planning Review Consult in May In the spring of 2012, the Exchange reviewed and completed an analysis of the final Exchange and Medicaid eligibility rules, creating summary memorandums and an updated existing Business Requirements Document (BRD) that captures the changes and requirements that the state must comply with for successful implementation. The Exchange conducted a gap analysis between the previously defined business requirements and guidance proposed in these two final rules, as well as continuing to address the sub-regulatory guidance that emergence from HHS and other federal agencies. The Exchange has also completed the development of a unified test strategy that includes detailed scenarios and plans. The importance of testing progress throughout the development and implementation of the IT solution is clearly understood. The Exchange will leverage these artifacts, along with the strong network of internal and external stakeholders, to ensure the IT solution is adequately tested and ready to go live during the fourth quarter of Included in these documents are specific test cases for each development sprint, including functional and non-functional requirements. The Exchange utilizes the EIAC to ensure a viable solution. The EIAC meets on a bi-weekly basis and discussion topics have included plan management, enrollment and eligibility, SHOP, premium billing and JAD session support. Additionally, as mentioned earlier, in order to manage the operational and technical requirements of multiple stakeholder agencies, an interagency governance structure was established, including DHMH, DHR, the Exchange, MIA and DoIT. The IT systems governance structure includes a Coordinating Committee consisting of business, technical and policy stakeholders from all agencies, as well as the IT vendors. The Coordinating Committee meets weekly to discuss all tasks and requirements that impact the project and to expedite responses for critical questions. Items for this group include, but are not limited to, policy decisions, business requirements, issue and risk management and direction setting. In parallel to the Coordinating Committee, detailed work groups have been instituted for eligibility and enrollment, plan management, financial management and consumer and stakeholder engagement and support, as well as non-functional requirements as a means of securing consensus across stakeholder organizations on decisions that are critical for the implementation of the exchange. As expected of an early innovator state, Maryland routinely participates in calls with federal officials and other states to share ideas and identify opportunities for partnership. These conversations allow the Exchange to learn from other states and to share the knowledge being gained. vii. Financial Management and Program Integrity Maryland has a robust infrastructure for the financial management of Exchange Planning, Early Innovator and Level One Establishment Grant funds. DHMH has served as the grants manager for all of these grants, and will continue to manage these funds. As a public agency of State government with an annual budget exceeding $8 billion and approximately 10,000 employees, DHMH follows generally accepted accounting principles, with multiple oversight and program integrity levers in place. For example, within DHMH there is an Office of the Inspector General (OIG) to protect program integrity and act as a source of objective, relevant and reliable information in assessing the business practices of DHMH internal and external customers. DHMH also works with the Maryland Department of Budget and Management, which helps the Governor, state agencies, and employees provide effective, efficient, and fiscally sound government to the citizens of Maryland. In addition, DHMH is subject to audits by the Department of Legislative Services Office of Legislative Audits. As a public corporation and an independent unit of state government, the Exchange is subject to numerous State laws including adoption of regulations under the Administrative Procedure Act, access to public records, open meetings, immunity and liability of state personnel, public ethics, procurement laws for minority business participation and policies for exempt units and whistleblower and other provisions of state personnel law. In July 2011, the Exchange Board approved a procurement Page 8

9 policy which went into effect immediately. This policy follows many of the state procurement policies but enables the Exchange to be nimble enough to meet the time requirements set forth by the ACA. The Board itself is subject to various oversight and fiduciary responsibilities. In the first quarter of 2012, the Exchange met with DHMH to review the budget, accounting, payroll, corporate compliance and audit functions that have supported the Exchange since inception. These meetings were to determine if DHMH would continue to provide these functions or if the Exchange would handle these functions on its own as an independent corporation. After careful consideration and in depth examination of DHMH processes and systems, the Exchange decided for the short term to maintain the use of DHMH's budget, accounting, payroll and compliance and audit functions. These recommendations were presented to the Exchange Board in March The Exchange will establish a Memorandum of Understanding (MOU) with each functional division that will specify the service level, terms and conditions. viii. Health Insurance Market Reforms Governor O Malley signed legislation entitled Health Insurance-Conformity with Federal Law into law on April 12, This codified in Maryland s Insurance Article market reforms laid out in the ACA for the individual, small group and large group markets such as coverage of children up to age 26 and minimum loss ratio requirements and premium rebates. The Maryland Insurance Administration (MIA) oversees and enforces these consumer protections to ensure compliance with the early market reforms. The MIA received a Cycle I Rate Review Grant in the amount of $1 million from the Department of Health and Human Services (HHS) for the period, September 7, 2010 through September 30, The grant period was then extended through September 30, The Cycle I Rate Review Grant is intended to help states strengthen the review of health insurance premium rates. The MIA established three objectives for the grant: (1) to enhance the premium rate review process; (2) to provide information to consumers and public policymakers about changes in rates in the individual and small group market segments and the key drivers for these changes; and (3) to improve data collection and tracking capability for reporting information related to rate increase requests as required by HHS. The MIA retained the actuarial firm, Oliver Wyman, to provide recommendations on enhancing the premium rate review process and providing information to consumers and public policymakers. Oliver Wyman provided recommendations in the form of two reports to the MIA and a public hearing was held on June 23, 2011 to solicit comments on these recommendations. On August 17, 2011, the Commissioner published a final report on the recommendations to be implemented. 8 Thirty-six recommendations were made and, to date, 23 of them have been implemented. The remaining 13 recommendations are in progress or under consideration. Additionally, on July 1, 2011 CCIIO determined that the MIA has an effective rate review process and on July 29, 2011 determined that Maryland s external review process satisfied ACA criteria. Using the Cycle I Rate Review grant funds, the MIA has hired an actuary and two actuarial assistants to support the enhanced rate review and consumer disclosure. ix. Providing Assistance to Individuals and Small Businesses, Coverage Appeals and Complaints There are many efforts in Maryland to educate consumers, businesses, health care providers and others about health coverage. Maryland has a strong and demonstrated legacy of providing support to consumers for handling complaints and grievances about health care and consumer protections. Existing call centers and resource lines in the state through Medicaid, DHR, MIA and the OAG assist consumers by responding to requests for information, answering questions, facilitating health plan enrollment and/or provider selection, filing complaints and handling grievances and appeals. 7 Even before the passage of this law, the General Assembly gave the MIA the authority to enforce the provisions of the Affordable Care Act for one year. During this year, the MIA required health insurers to amend their policies to include the benefits required to be offered on or after September 23, 2010 and established an open enrollment period for child-only policies. 8 The report can be found on the MIA s website: Page 9

10 The Health Education and Advocacy Unit (HEAU) in the Consumer Protection Division of the Office of the Attorney General (OAG) assists consumers with health care-related complaints as well as the internal appeals and grievance process when coverage has been denied by a carrier. The HEAU annually reports on the grievances and complaints filed with, or referred to, a carrier, the Insurance Commissioner, the HEAU, or any other federal or state government agency or unit under the Maryland insurance article during the previous fiscal year. The HEAU s report includes an evaluation of the effectiveness of the state s internal grievance process and complaint process and any proposed changes that the HEAU considers necessary. In 2011, the HEAU received more than 2,000 consumer complaints and obtained more than $ 1 million in relief for consumers. In October 2010, the HEAU obtained a Consumer Assistance Program Grant that expanded HEAU s capacity and increased the consumer assistance it has historically provided to Marylanders in the appeals and grievance process and expanded outreach to Maryland consumers. Anticipating the volume of complaints and appeals that will occur from consumers, as well as the need for education and training of Exchange staff, advocates, health care professionals and consumers about consumer protections related to appeals and grievances, the HEAU and the Exchange have entered into an MOU. Subject to receipt of funding, the MOU will allow the HEAU and Exchange to leverage existing resources and expand capacity to support and incorporate consumer assistance functions of Exchange, help consumers file grievances and appeals, provide information about consumer protections and collect data on inquiries, problems and resolved consumer issues as it relates to qualified health plans, and assist exchange enrollees or potential exchange enrollees. In 1998, Maryland enacted an appeals and grievance law to provide a fair process for resolving disputes regarding the medical necessity of health care services. Since then, the MIA has had an Appeals and Grievance unit, whose staff assists Maryland consumers with the external grievance process. In addition, the MIA has a Life and Health Complaint unit that handles complaints on life and health insurance contracts that are not related to external review. The MIA s Consumer Education and Outreach unit conducts outreach at many community events and locations to help consumers with insurance questions and provide information. In 2011, the MIA s Appeals and Grievance unit recovered more than $500,000 for complainants. 9 The MIA annually reports on adverse decisions and grievance decisions to inform Maryland policymakers on trends and identify potential policy issues. Maryland s Medicaid program has a number of call centers and contracts with outside vendors in place to provide assistance to individuals. For example, Medicaid handles approximately 25,000 managed care enrollments per month. Other significant consumer assistance resources exist at DHR and the Maryland Department of Aging, among others. For some call centers there is already a sophisticated tracking mechanism in place to collect and analyze data from consumer assistance programs; for others, data collection is more rudimentary. 10 In January 2012, the Exchange awarded a contract to a consultant to complete a detailed inventory of the existing consumer assistance resources and the complaint, grievance and appeals processes available to the Maryland health care consumer through the MIA, OAG, DHMH and MHCC. The study s primary objective was to measure the ability of the existing infrastructure to support the influx of members beginning in 2014, and to make recommendations on how these entities could continue to support the Exchange moving forward. The recommendations from this report are included in the Proposal to Meet Program Requirements. x. Business Operations and Exchange Functions The Exchange has continued with planning activities for many of the business operations leading to the development of goals and milestones as outlined below: MIA reports: and Page 10

11 Certification, Recertification and Decertification of QHPs & QDPs: An Exchange Implementation Advisory Committee (EIAC) has been convened to create a forum for the Exchange and industry partners to discuss operational, IT and policy matters related to implementation. The Exchange has utilized this committee, which includes representatives from all of Maryland s major insurance carriers, to assist in ensuring that the all ACArequired certification standards are understood by all industry partners. Additionally, the Exchange has also engaged this committee and other subject matter experts (SMEs) to define relevant requirements for areas not dictated by the ACA (e.g. dental and vision plan. Call Center: With Level One Establishment funds, the Exchange completed an inventory of the current call center capabilities in the state to define a roadmap for moving forward. Existing call centers in the state serve specific purposes with distinct differences in populations. Preliminary findings indicate that none of the existing call centers will be able to fully support exchange functions, although some functions can be utilized. Exchange Stakeholder Website: The Exchange has maintained a public stakeholder website that provides information about board meeting dates, agendas, materials and presentations, as well as advisory committees, reports, news, bylaws and legislation. With funds from the Level One Establishment grant, the Exchange is in the process of redesigning the website to include specific sections for advocates, plan issuers, brokers, third-party administrators, navigators and links to the consumer portal. Premium Tax Credit and Cost-Sharing Reduction Calculator: The Exchange has defined detailed functional requirements for the advanced premium tax credit (APTC) calculator based on ACA requirements and has identified federal and state data sources required to complete APTC and Cost Sharing reduction calculations. Quality Rating System: The Exchange has started to collaborate with MHCC on the existing quality review processes that can be leveraged. An initial review of MHCC s quality rating procedures has been conducted to identify alignment and gaps with requirements of the ACA requirements; a supplemental process has been developed to collect and report upon quality data for dental and vision plans for Navigator Program: An internal workgroup including representatives from the Exchange, DHMH, DHR and MIA was established to define workflows, develop regulations and create certification requirements. A Navigator Advisory Committee was formally established by the Board in May 2012 to engage stakeholders in the ongoing process of developing the navigator training curriculum and addressing program requirements. The workgroup will meet throughout the next year to address the myriad of issues impacting the navigator program. Eligibility Determinations for Exchange Participation, APTCs, Cost Sharing Reductions and Medicaid: Through extensive functional and technical JAD sessions, the Exchange identified the majority of federal and state data sources that will be used for eligibility determinations, APTCs, cost sharing reductions and eligibility for public assistance programs. Work is underway to create MOUs to access those data services through real-time and batch data exchanges. Seamless Eligibility and Enrollment Process: Since eligibility and enrollment in state programs occurs through programs managed by the DHMH and DHR, the Exchange created a cross-functional team consisting of eligibility and enrollment experts. The workgroup has met weekly for several months since the beginning of 2012 to outline the roles and responsibilities of current state employees, such as case workers at local social service offices. Technical requirements from this committee have been shared with the PMO and vendors to incorporate into the business requirements. Individual Responsibility Determinations: Maryland has included requirements for individual responsibility determinations as part of the scope of work for Phase 1A of the eligibility and enrollment system. The rules for determining whether an individual must purchase health insurance will be configured into the core system. Administration of APTCs and Cost Sharing Reductions: The core system procured by the Exchange through Level One funds will be the source system of record for eligibility for APTCs and cost sharing reductions. As such, the system will allow Marylanders and navigators to review income and other relevant information, make relevant notes or adjustments and store information by enrollee to determine the value of APTCs and cost sharing reductions when making plan enrollment decisions. Adjudication of appeals of eligibility determinations: In creating its own Appeals and Grievances program, the Exchange has evaluated several state-based appeals programs to determine best practices. Thus far, this evaluation has included HEAU, MIA and Medicaid. The Exchange has begun assessing the extent to which the Maryland Office Page 11

12 of Administrative Hearings can be utilized, and has contacted other states regarding plans and practices for the handling of appeals and grievances. The Exchange will work with Medicaid on business processes to ensure adequate consumer protections for households where the parents might be enrolled in the Exchange, and the children enrolled in Medicaid or CHIP and the entire household is appealing an eligibility determination. Moreover, the Exchange will work with Medicaid on business processes if the underlying appeal that is presented to the Exchange involves an initial determination that an individual or household was found to be Exchange-eligible, but seeks to be determined Medicaid-eligible instead. Notification of appeals of eligibility determinations: The Exchange developed requirements for and procured a core HIX system that includes robust functionality for notifications and correspondence through a variety of stakeholder-determined methods including online reports, and the generation of paper-based correspondence. Information reporting to IRS and enrollees: Maryland developed business requirements for a set of standard reports to the IRS and all other federal and state oversight bodies as part of the scope of work for Phase 1A of the Eligibility and Enrollment system project. The Exchange has procured business intelligence and reporting platform upon which the required report generation logic for enrollee data will be created. Communications and Outreach: During the fall of 2011, the Exchange engaged an advertising agency to conduct an environmental scan and market analysis in order to identify, segment and prioritize audiences in Maryland for the advertising and public relations campaign. The research provided insight into the impact of demographics, psychographics and attitudes on exchange positioning and health care reform in Maryland. Since completion of the study, the Exchange has begun pre-enrollment communications outreach with stakeholders including legislators, brokers, advocates and opinion leaders through speaking engagements, public relations, online communications and partnerships. Since January 2012, the Exchange has been conducting research to develop a brand and name for the consumer portal the Exchange is currently engaged in a formal branding process scheduled to conclude in July. Risk adjustment and transitional reinsurance: Led by the MIA, Maryland has done in-depth analysis regarding the options for risk adjustment and reinsurance. The MIA met with each carrier individually to review concerns, availability of data and processes. Additionally, a consultant helped the state assess the operational and market impacts of developing a state-specific model as opposed to using the federal model for each program. A crossfunctional steering committee made up of the GOHCR, MHCC, MIA, Exchange, MHIP, Hospital Services Costs Review Commission (HSCRC) and Hilltop Institute, met to review options and make recommendations to the Board in May SHOP Exchange specific functions: Through feedback from the stakeholder advisory committee process, the 2012 Maryland legislation separates the SHOP and individual exchanges. The individual and small group market pools will not be merged in 2014 and navigators will be focused on one market or the other to support the disparate needs of each market. With this in mind, the Exchange has been focused on determining which functions can be shared and reused between the exchanges from both a technical enablement and ongoing operations standpoint. For instance, the state is considering the possibility of managing premium billing and collection for the individual exchange by sharing components of revenue life cycle management and other financial management capabilities of the SHOP. The third-party administrator market in Maryland is considerably robust, and as such, the Exchange has also been very focused on how to incorporate TPAs into the solution to maximize small group employer enrollment in SHOP QHPs. To this end, the Exchange Board has approved a plan to augment Maryland s internal SHOP online marketplace and back-office administration capabilities with those of the TPAs through a structured certification process. TPAs that are certified to provide SHOP services will be required to meet a set of technical and operational service level agreements in addition to all the requirements set forth by the ACA and the state. Page 12

13 B. PROPOSAL TO MEET PROGRAM REQUIREMENTS The Maryland Health Benefit Exchange has made, and expects to continue to make, progress toward the establishment of a state-based exchange as presented in the previous section of this application for Level Two Establishment funding. Maryland is on schedule to provide a fully functional exchange for individuals and small business in the state by October 1, 2013 inclusive of HHS certification requirements and milestones for Establishment Level Two funding as outlined in the following Proposal to Meet Program Requirements. The State of Maryland, including the Maryland Health Benefit Exchange, has met the following readiness criteria for Level Two Establishment Funding: Legal authority was established with the passage of the Maryland Health Benefit Exchange Act of 2011 that provided the authority to establish and operate an exchange that complies with federal requirements. On May 2, 2012, the O Malley-Brown Administration signed into law the Maryland Health Benefit Exchange Act of 2012 which furthers the establishment of the Exchange. The Exchange Act of 2011 also provided the governance structure for the Exchange; a nine-member Board of Trustees was appointed by Governor O Malley in May 2011 and meets monthly. The Exchange has submitted a detailed budget through 2014 to support this application. The Maryland Health Benefit Exchange Act of 2012 requires the Exchange to complete a financing study and submit recommendations for a plan for financial mechanisms that will enable the Exchange to be self-sustaining by 2015 to the General Assembly by December 1, 2012 for the 2013 legislative session. The Exchange has developed a plan to prevent fraud, waste and abuse as outlined in Section viii (Oversight and Program Integrity). The Exchange has developed a plan to provide assistance to individuals and small businesses in the state as outlined in Section v (Providing Assistance to Individuals and Small Businesses). The table below represents the Hilltop Institute s revised estimates for the state for 2014 through Based on the model, Hilltop estimates that 145,346 people will enroll in the individual and SHOP exchanges in 2014, increasing to approximately 274,059 by An additional 101,685 individuals will be new to Medicaid in 2014, growing to 187,276 in During the Level One grant application process, Hilltop estimated the enrollment split between Medicaid and the Exchange to be 42% and 58% respectively. The same calculation remains for this grant application as well. Maryland Medicaid and Exchange Enrollment Projections, Medicaid Enrollment Current Medicaid (Excluding PAC) w/o ACA 986, ,275 1,004,559 1,018,234 1,032,785 1,045,455 1,056,676 Law 2. Total Increase in Medicaid (incl. PAC) 101, , , , , , ,276 (D.1.+D.2.) 3. Medicaid with ACA Law (B.1.+B.2.) 1,088,032 1,128,677 1,156,494 1,185,380 1,207,779 1,227,410 1,243, MCHP (included in lines 1. and 3.) 107, , , , , , , Total Uninsured Medicaid Eligible (w/o ACA) 184, , , , , , , Remaining Medicaid Eligible Not Enrolled 152, ,116 96,256 77,749 71,765 68,837 66,469 Medicaid Take Up Rate 87.7% 90.7% 92.3% 93.8% 94.4% 94.7% 94.9% Exchange Enrollment 1. Total Exchange (Sum of Rows D.3 thru D.6) 145, , , , , , , Potential Exchange Enrollment (Remaining US Citizens >138% FPL, not Enrolled) 243, , , , , ,412 99,841 Page 13

14 Health Insurance Exchange Take Up Rate 37.4% 44.1% 47.8% 55.0% 61.5% 67.5% 73.3% Health Care Reform Components 2014 * Medicaid Expansion (Includes PAC Enrollees) 90, , , , , , , Medicaid Prev Eligible/Not Enrolled 11,046 23,117 32,301 40,150 41,793 42,956 44, Exchange ( % FPL) with Subsidy 36,972 42,019 44,260 49,148 54,437 59,984 64, Exchange ( % FPL) with Subsidy 66,427 77,404 83,329 94, , , , Exchange (Above 400% FPL) without Subsidy 33,478 40,691 43,239 51,005 58,320 65,260 71,927 6.Small Business Health Options Program (SHOP) 8,469 8,561 10,109 10,151 10,144 10,151 10,158 Total New Medicaid and Exchange Coverage 247, , , , , , ,335 *Health Care Reform programs start on January Medicaid enrollment data for FY2014 correspond to 6 months of enrollments. However, Exchange enrollment reflects Open Enrollment period which is from October 2013 through March i. Background Research While the Exchange has completed the necessary background research for planning and implementation, the staff and Board recognize that additional research will be necessary to test assumptions, develop additional policies and adjust estimates, including: Cost Allocation Study Evaluate cost allocation strategies between the Exchange, Medicaid and DHR Salary Study Analysis to develop Exchange-specific salary scale as defined in 2011 statute SHOP Uptake Analysis Study Analysis to estimate the percentage and number of groups who will purchase in the exchange and the impact to market. Continuity of Care Study Study to determine what mechanisms should be put in place to decrease repeat care and lower costs when churning between plans Call Center Volume and Procurement Analytic study to estimate the volume of calls through the call center; informs the procurement process for service center and outlines best practices for SLAs and procurement strategies. Reinsurance Study Create scenarios to test the reinsurance model and outline the specific steps Maryland must take to put reinsurance program in place. Individual Billing and Collections Study Assess operational impacts of collecting individual payments; define best options for the state to utilize technology to support collections. Financing Study * Required study by General Assembly to determine specific funding mechanisms for the Exchange to become sustainable in Navigator Roles Study * Study the specific roles of navigators in during non-enrollment periods, how the Exchange should contract with entities and ensure hard to reach populations is addressed. The Exchange is requesting Level Two Establishment funding for the eight studies outlined above (*Financing and Navigator studies funded with Level One Establishment funds). ii. Stakeholder Consultation A tenet of the Exchange since inception, continued stakeholder engagement will provide opportunities for dialogue with diverse populations statewide leading up to open enrollment in October Exchange staff will continue making presentations to educate and inform individuals, small businesses and professionals in local and state agencies about the individual and small business exchanges The EIAC will continue to meet throughout 2013 in order to address operational and technical issues The Communications Advisory Committee, a standing stakeholder committee co-chaired by the Director of the Governor s Office of Health Care Reform and the Director of Communications and Outreach for the Exchange, will continue to serve as a valuable resource for the Exchange as the outreach and communications campaign is developed and implemented. The committee comprised of academics and experienced communications practitioners, will provide feedback and recommendations on strategies and tactics relating to the outreach campaign. Page 14

15 The Exchange is required by statute to maintain two standing advisory committees. These committees can vary from year to year but should support the decisions being made in any particular year. Three new advisory committees were established in May 2012 to provide stakeholders with the opportunity to participate in the process as the Exchange considers key policies and procedures for the implementation of the ACA; these include the Navigator, Plan Management and Continuity of Care Advisory Committees. As with past committees, representatives will reflect the gender, racial, ethnic and geographic diversity of the state. All committee meetings are open to the public and public comment is heard at the conclusion of each meeting in accordance with the Open Meetings Act. To facilitate ongoing communication with stakeholders, the Exchange maintains a website that provides information, resources and news. All meeting schedules, agendas and applicable materials are available on the website for stakeholders, as well as legislation, research, Board resolutions, and pertinent information. A redesigned site is scheduled to launch in August 2012 that will provide a calendar of events, toolkits for brokers, certification manuals, navigator resources, and more. iii. State Legislative and Regulatory Actions Maryland has taken a measured approach to legislation, moving incrementally and deliberately to meet the 2014 timeline, including the passage of two laws to support the establishment of a state-based exchange. The state will address the remaining statutory issues during the 2013 legislative session. In December, the Joint Finance Committee will submit its recommendations for financial sustainability for the Exchange to the General Assembly; this recommendation will be included in 2013 legislation with the expectation to be passed in April 2013 (as outlined in the Appendix D). Additionally, the 2013 legislation is expected to modify several existing small group market requirements to align with the Exchange and incorporate any required statutory language to support continuity of care inside and outside the exchange. Pursuant to the Maryland Health Benefit Exchange Act of 2012, the Exchange will adopt regulations that govern broker authorization to sell within the SHOP and individual exchanges, as well as individual exchange navigator certification and training standards. The Exchange has identified additional subject areas requiring regulations, including call center operations, eligibility determination and verification and appeals and grievances, as well as fraud, waste and abuse. The Exchange strives to ensure transparency and inclusiveness throughout the regulation development and promulgation process. The process therefore includes several opportunities for stakeholder and public input, in addition to the formal public comment solicitation period required under the Maryland Administrative Procedure Act. Draft regulations will be vetted by the Exchange Board, interagency workgroups, advisory committees and the public. iv. Governance The nine-member Board of Trustees governs the Exchange will continue to meet monthly throughout 2013 and 2014, with additional meetings scheduled as necessary to meet pending policy decisions. An annual meeting is required by statute in June and an annual report is published in December. All meeting times and locations are posted on the stakeholder website and open to the public in accordance with the Open Meetings Act. Meeting agendas are made available online prior to each meeting, as well as presentations. Meeting minutes, once approved, are also posted to the Exchange website. v. Program Integration The Exchange will continue to work with state agencies to determine how collaboration and integration can foster a seamless implementation process through 2014 and seamless enrollment once the exchange is operational. Workgroups will continue, and expand, to address the myriad of operational issues to integrate the Exchange with the MIA as it pertains to insurance matters, as well as Medicaid and DHR pertaining to public assistance programs. By late 2012, the Exchange expects to have MOUs finalized with the MIA, MHCC, DHMH, DHR, OAG, DoIT and CRISP outlining the specific functions to be performed by each agency to support the collaborative efforts to enroll uninsured Maryland residents in health insurance programs and plans. The high-level functions to be performed are included below but may not be limited to the following: Page 15

16 Agency MIA MHCC DHMH/ Medicaid DHR OAG (Health Advocacy & Education Unit) Department of Information Technology (DoIT) Statewide Health Information Exchange/Chesapeake Regional Information Systems for our Patients (CRISP) Support Plan Management Functions Quality Reporting Eligibility Determinations Fraud, Waste & Abuse Operational Support MCO Enrollment Appeals Continuity of Care Outreach and Education Eligibility Determinations Coordination/referrals between social programs and health programs Consumer Assistance Appeals & Grievances Internal IT support Continuity of Care Master Patient Index Provider Information Management Significant progress has been made to support a seamless and streamlined process for determination of eligibility for Exchange coverage, Medicaid and other social services through the consolidated efforts of the Exchange, DHMH and DHR. Maryland s commitment extends beyond eligibility to coordinating care transitions between Medicaid MCOs and QHPs offered through the Exchange. Research suggests that the income of individuals below 400% of the federal poverty level frequently changes, particularly for those at the lower income level. The changes in income often result in significant churn between Medicaid and QHP coverage and supporting individuals through these coverage transitions is an essential strategy to ensure continuity of care. Maryland s statewide Health Information Exchange (HIE) can be leveraged to ensure that clinical records follow members transitioning between Medicaid MCOs and QHPs. Maryland requests Level Two Establishment funds to support the development and implementation of integration between CRISP and the HIX to ensure clinical information flows between Medicaid MCOs and QHPs to support member transitions between Medicaid plans and the Exchange. CRISP currently receives encounter data from every acute care hospital in Maryland, as well as other care settings, through real-time connectivity. CRISP is on schedule to receive lab data, radiology reports, discharge summaries, history and physicals, and operative reports from all Maryland hospitals before QHP enrollment begins in This comprehensive connectivity enables CRISP to create a clinical summary document (in a Continuity of Care Document c32 specification format) that can move with a member when transitioning between plans. This document has the potential to provide valuable information to care coordinators about new members health care needs as well. Level Two funds will be used to develop and deploy a member migration file that identifies opportunities for care coordination between health plans. All Payer Claims Database: For many core functions, the Exchange will rely on Maryland s All Payer Claims Data Base (APCD). For example, the Exchange anticipates utilizing the APCD to support reinsurance and risk adjustment programs and analyses, certain elements of a quality reporting system, and for providing greater transparency in the pricing and quality reporting on health care services. In addition, the refinements envisioned will support the assessment and evaluation of the Exchange s core measures of success and more broadly health reform. The Maryland Medical Care Data Base (MCDB) is an all payer claim data base (APCD) that has been developed by the Maryland Health Care Commission to support analysis of health care spending and the utilization of services. The importance of this APCD will grow as health care reform initiatives take root in Maryland and as monitoring and assessment requirements for the ACA are implemented. The APCD includes almost all fully insured and a majority of all self-insured claims. The data base currently reflects the experience of 3.1 million privately insured and 720,000 Medicare beneficiaries. Page 16

17 There are several limitations to the Maryland Medical Care Database which constrain its ability to support business functions of the Exchange. First, Medicaid eligibility and claims have not been collected because the Maryland Management Information System (MMIS) currently in use by the State does not support the capture of reimbursed amounts from the Managed Care Organizations (MCOs) that participate in the Maryland Medicaid program. The lack of information on reimbursement makes it impossible to generate estimates of utilization for the Medicaid population. Second, the APCD lacks a common, consistent, encrypted patient identifier across all submitters to the APCD. The current data base, like most state APCDs, relies on payer-specific encrypted patient identifiers. These identifiers can be used as long as a patient is continuously enrolled in the same health plan with the same employer. If the employer changes plans or a subscriber changes jobs, the identity of the patient is lost. Third, the current APCD captures data on an annual basis and more frequent data collection is needed to support on-going business functions. Fourth, it does not capture specific plan information for individuals. Level Two Establishment Funds are requested for enhancements to Maryland s APCD to enable it to support reinsurance and risk adjustment, certain elements of a Quality Reporting System, and evaluation of core measures of Exchange success (discussed in Evaluation Section). The enhancements are to include Medicaid Eligibility and Claims Information and Pharmacy Benefit Manager Claims in the All Payer Claim Data Base; leverage the Statewide Health Information Exchange Master to establish a Consistent Patient Identifier for the All Payer Claim Data Base; and collect information more frequently. Below is a list of Exchange-specific applications that can be achieved if the APCD is funded. 1. Reinsurance: The APCD has the potential to support the health reinsurance program being developed for the Exchange. The Exchange staff in collaboration with other agencies will assess the APCD for 1) generating actual expenditures per enrollee by market type for use in reinsurance calculations; 2) calculating total paid claims for selfinsured employers (reinsurance assessment); 3) modeling the funds available under various assessment rates and reinsurance parameters (attachment point, coinsurance rate, reinsurance cap); 4) information on health status of enrollees to model impact of contribution requirements on premiums in the individual market. The actuarial analysis supported by the grant funds will be data-intensive and will necessitate analyzing claims data on the frequency of large claims payments. The APCD will also serve as a quality control tool for monitoring the effectiveness of the third party organization in implementing the reinsurance program. 2. Risk adjustment: Maryland has elected to defer implementation of a state-based risk adjustment program until 2016, but the 2012 legislation directs the Commissioner and the Exchange to study the feasibility of establishing a state-based program at a future date. To support the study and potential implementation of risk adjustment in 2016, an enhanced APCD will need to be available if the state is to assume responsibility. To support the risk adjustment assessment, the APCD will contain: 1) data on demographics of enrollees including a unique patient ID, diagnosis and pharmacy codes for each enrollee who uses services to calculate normalized risk scores at the individual product and carrier level, payment information by service; 2) error rate calculations in audit (unsubstantiated codes); 3) model development or testing possible adjustments of the federal weights; and 4) development of normalized risk scores. 3. Quality Reporting and Price Transparency: The enhanced APCD will be used by the Exchange to support the development and display of measures on QHP performance to provide information to consumers when making their plan decisions. This data will support the Exchange in achieving one of its goals to create a transparent marketplace for Maryland consumers. 4. Evaluation: The enhanced APCD will enable measurement and evaluation of core measures of the Exchange s success and health reform initiatives. (See Evaluation section). A robust APCD contains both declared data, which is captured from administrative claims processing, and derived data, which consists of the analytic components developed from or merged to the declared data. The derived data components include unique identifiers, risk scores, care relationship definitions (attribution rules), episode constructs, and definitions for ambulatory sensitive admissions, potentially avoidable readmissions and ER visits. These derived data will make the Maryland APCD a powerful tool for enabling the Exchange to monitor who benefits from the ACA and how these individuals are seeking care. Work anticipated under this grant will Page 17

18 establish an essential derived data element, the unique encrypted patient identifier. The existence of this derived data element is a precondition to making the most effective use of an APCD for monitoring insurance coverage transitions, managing total cost of care, improving quality, and supporting delivery reform. Additionally, the Exchange will need plan and product design information to assess how plans associated with the four metal levels perform in Maryland s small and individual markets. The state proposes to enhance the APCD by adding an insurance product design file that will contain information pertinent to each insurance offering sold in the insurance market in Maryland. Information on enrollee cost-sharing will be reported for individual and family policies as well as other characteristics including service maximum for certain types of services and identifiers that indicate any services that require pre-authorization or referrals. This information, when combined with the APCD claim data, will be used to examine preferences of different populations for the products offered in the Exchange and to more precisely study whether higher risk and more vulnerable populations experience gaps in care or forego care. vi. Exchange IT Systems By 2014, the Maryland Health Insurance Exchange ( HIX ) system will be the source system of record for all MAGI-determined Medicaid and CHIP eligibility, as well as for eligibility determinations for purchasing qualified health plans (QHPs), advance premium tax credits (APTCs) and cost share reductions (CSRs). Later phases of the implementation (post-2014) will address expansion of system functionality to incorporate non-magi Medicaid determinations, as well as eligibility for social service programs such as SNAP and TANF. The Medicaid agency is working collaboratively with the Exchange to pursue complementary 90/10 federal Medicaid funding related to the portion of the overall system that is not core to the Exchange but will support the Medicaid program and the related social services programs that will be financed through CMCS. Additionally, the core HIX system will support the other requirements for certified state-based exchanges including plan management, plan presentment and selection, customer support, financial management and reporting. Maryland intends to leverage the core HIX system for its Small Business Health Options Plan (SHOP) as well, procuring additional technology and services as required. Maryland has made significant technical progress under the funding provided by its Early Innovator and Level One Establishment grants. Completed milestones include: the creation of an IT program management office (PMO); production of artifacts for several CMS Exchange Life Cycle (ELC) gate reviews; and on-boarding of an IT vendor for the design, development and implementation (DDI) of the core HIX system. Pursuant to Maryland s CCIIO/ONC-aligned technology strategy, the contract for IT vendor services includes licensing for commercial off-the-shelf (COTS) products that will be integrated with a standards-based service-oriented architecture (SOA) platform allowing these systems to not only interoperate with each other, but with other systems in the exchange ecosystem as well. These systems include the federal data hub, state eligibility sources, other state federal and state systems and issuer systems. In terms of overall technology implementation status, Maryland has completed its project start-up (PSR), architectural (AR), project baseline (PBR) and preliminary design (PDR) gate reviews. With the onboarding of the primary systems integrator for the core HIX system, Noridian Administrative Services, LLC (NAS), in March 2012, Maryland is also poised for its detailed design review (DDR) with CCIIO in August A risk area identified in Maryland s Level One Establishment grant request was the uncertainty created by outstanding federal rules and guidance, state policy and operational decisions, and their collective impact on technology requirements. Through the work of stakeholder advisory committees and consultant analyses in 2011, many of these outstanding state policy and operational design questions were answered. The resultant strategies were approved by the Exchange Board with some elements adopted into Maryland law through the Health Benefit Exchange Act of Further, requirements specified in the 2012 Exchange final rule have been incorporated to Maryland s baseline business and technical requirements. All requirements are reviewed and approved by the IT Coordinating Committee which consists of business and IT leaders from all state stakeholder agencies. This committee meets weekly to review issues and risks and has escalation procedures in place to escalate to cabinet level secretaries as well as the Exchange Board of Trustees. Page 18

19 Below is a diagram outlining the project time line: As the diagram above shows, Maryland intends to complete development and testing of all system components required for CMS certification by December 31, 2012 including data, interfaces, performance, security, and infrastructure. As Maryland uses an Agile development approach where development code drops are implemented via iterative sprints, some statespecific requirements not in the critical path for CCIIO certification will be deployed post-january Security accreditation will begin in January 2013 and is anticipated to be complete by June The system will be user tested, interface tested, operationally tested, deployed, and production-ready by June Specifically, with regard to testing and quality assurance, Maryland intends to engage with insurance carriers, managed care organizations and navigator entities to support integrated testing beginning in Q4 of 2012 and will obtain the services of an IV&V vendor in the third quarter of 2012 to support the IT certification effort. In order to meet the needs of CCIIO and CMS in a timely and effective manner, Maryland will continue to work with federal partners to ensure the needs and requirements of the newly established ELC process are met. Maryland has instituted the aforementioned ILC artifacts within the contracts between the state and the IT vendor that has been established to develop the HIX; therefore, an extensive mapping of the required artifacts to ensure and, more importantly, warrant that the requirements of the state stakeholders are met. Progress will be monitored throughout the various consults and formal reviews to make certain that the deadlines are met and that Maryland is postured to successfully employ a state based exchange in The result of these development and implementation efforts will be the systems architecture depicted in the following diagram. Given the high level of integration with Medicaid expansion in Maryland and the use of enhanced funding from CMCS, this architecture will be compliant with the Medicaid Information Technology Architecture (MITA). As such, the core HIX system will meet the seven required standards and conditions of MITA: modularity, MITA alignment, capability for reuse for other states, industry standard alignment, support of business results, reporting, seamlessness and interoperability. Maryland s systems procurement strategy placed heavy emphasis on COTS products due to the lack of extensible systems within the state and severe time constraints. Moreover, Maryland has the desire to acquire upgrades to functionality through standard product releases supported by the shared investment of multiple customers via license and maintenance fees versus costly custom development. Each of the COTS products selected by Maryland is currently used by multiple states or companies and all are foundationally in alignment with MITA and industry-accepted SOA principles Page 19

20 Maryland s Level Two Establishment grant application includes the funds required to complete the implementation of the core HIX system as well as to procure the technology and services that will help ensure a robust and effective technology platform for ACA-compliant operations beginning in the third quarter of As mentioned above, this approach will be completed with 90/10 funding for the portion of the overall system that is related to Medicaid and CMCS approvals. SHOP Technology: The Exchange Board approved a SHOP technology and operations enablement plan in April Additional software licenses and software development life cycle activities are required to make the Maryland SHOP operational according to this plan, which allows third-party administrators to provide SHOP online marketplace and back-office administrative services through interfaces and data exchanges with the HIX. This functionality is essential for the Exchange to have access to thousands of businesses that work closely with third-party administrators The Exchange will need to procure the in-house technology for billing and collections, financial reconciliation and banking services that support the required SHOP functions of consolidated billing and premium aggregation for small group employers. Customer Assistance Technology: The core HIX system includes robust tools for identity access management (IBM Tivoli Access Manager) and secure role-based access control. Within this framework, Exchange system administrators and authorized delegators such as navigator entities, will have the ability to provision and de-provision access to various stakeholders and different classes of customer assisters, monitoring their system usage and activity. Throughout 2012, Maryland will continue to define the detailed responsibilities, training requirements and licensure/certification requirements for navigators and other assisters associated with the Exchange. The technology required to support these assistors through multiple communication channels (web, chat, phone, etc.), validate training and credentials and track their work in support of consumers will be identified and incorporated into the overall HIX implementation plan by the end of the third quarter of The deployment of kiosks and other technical tasks to connect consumers with assisters and the HIX are anticipated. Testing, Quality Assurance and IV&V: Maryland s Health Care Reform PMO led the effort throughout 2011 and early 2012 to develop state-wide business and technical requirements for Medicaid expansion and the development of the eligibility and enrollment system. These requirements have been base-lined for the NAS development team and will be fully traceable to upcoming detailed design specifications and test case scenarios. The IT Project Plan (Appendix E) for the core HIX includes Page 20

21 testing at multiple levels including unit testing, system testing, integration and performance testing and user acceptance testing. Maryland will engage with an independent validation and verification vendor to support expert and impartial reviews of IT processes, deliverables and test results. The IV&V will also validate compliance with all applicable technology, security and privacy standards. These standards were identified in Maryland s Technology request for proposal (RFP) issued in October 2011 and include guidelines and regulations promulgated by HHS, IRS, Commerce (NIST), as well as statutes such as Section 508 of the Rehabilitation Act. Interoperability: Maryland has identified several integration points with state agencies that will be required to share data in the context of an end-to-end eligibility and enrollment workflow. Noridian s Exact SOA platform for the core HIX will provide secure standards-based integration to external systems and data sources via its enterprise service bus (ESB). Systems that the HIX will need to integrate with include the State s legacy eligibility system, CARES, Maryland s Medicaid Management Information Systems (MMIS), the MIA s Issuer Management System (NAIC SERFF) and multiple sources of state eligibility data (e.g. vital records, motor vehicles, unemployment insurance, etc.). To the extent possible, integration with other state systems will be through modern standards-based protocols such as web services (SOAP, XML, REST, etc.) in alignment with the National Information Exchange Model (NIEM) and in accordance to the recommendations made by ONC pursuant to Section 1561 of the ACA; however, since many are older legacy systems, special application programming interfaces (API s) will be developed to access required data and work flow information. The CARES system is a key component in Maryland s programs to connect citizens to public assistance. By 2014 all MAGIdetermined eligibility will move from CARES to the new HIX system; however CARES will still be employed for non-magi determinations and other social service programs such as SNAP and TANF. To avoid duplicate eligibility determinations and ensure successful integration, Maryland will need to fund development work to integrate CARES, HIX and MMIS. Below is a diagram that represents how the State will provide one point of entry for individuals, prevent duplicate eligibility determinations and limit the impact on legacy systems development. As seen in the diagram, the HIX will be the single point of entry, using web capabilities to send the appropriate data to CARES for non-magi determinations and case management. Duplicate eligibility checks will be done by connecting to MMIS, which is the system of record for Medicaid services. To keep the HIX up to date on the cases managed in CARES, data feed generated at least monthly will come from CARES to the HIX. Maryland will also implement a solution to prevent duplicate notices from going out to consumers; several of the functions will be managed through a COTS solution that is integrated with the Exact platform. Maryland has identified other potential risks to case generation, reporting and interfaces in CARES that result from the HIX taking over MAGI determinations that will need to be addressed. Level Two funding is requested to effectively integrate CARES, its downstream systems, MMIS and the HIX. Beyond internal state interfaces, Maryland will track evolving national standards for data exchanges (e.g. HIPAA X12), user interfaces (e.g. UX2014), development approaches, etc. by incorporating them into the overall interoperability plan with issuers, the federal government and other Exchange stakeholders. As an Early Innovator grantee, Maryland has taken a lead Page 21

22 role in collaborating with CCIIO/OIS in planning the technical services of the Federal Data Hub and intends to be an early adopter/tester of hub functionality. Data Management and Reporting: Maryland s core HIX solution includes robust tools and support for data storage and master data management. Statewide efforts are currently underway to identify the target source systems of record for customer demographic information, QHP and provider network information, enrollments, etc. and how all systems requiring such information can be synchronized with those data sources in a manner that minimizes duplication and proliferation of obsolete or conflicting information. Included in the core HIX platform is IBM s COGNOS business intelligence tool that will be used to support the development of reports, analytics and responses to queries. While a range of reporting requirements for a variety of purposes including performance management, public transparency, policy analysis and program reporting are included within contract with NAS, the state will need to augment data management and reporting capabilities as new requirements are identified. Through Level Two Establishment funds, Maryland will procure additional tools and services for the purpose of data extraction, transformation and loading (ETL) as well as the development of new reports and queries that support transparency, accountability and evaluation goals. Infrastructure: Maryland procured much of the required hardware and software (licenses and services) for building the core HIX through our Level One Establishment grant. Specifically, this procurement included the infrastructure necessary for our development and test environments with a portion being transferable to our production environment. Maryland still needs to procure the following to support our infrastructure needs using funds from the Level Two Establishment grant: 1) IT data center set-up services inclusive of additional hardware and software, monitoring and back-up services, connectivity, disaster recovery and business continuity; and 2) IT customer support call center. Where practical, Maryland will use virtualized and cloud-based services to maximize efficiencies while ensuring appropriate security and privacy safeguards and controls. IT Policy Development and Implementation: Maryland will set up the IT policies and procedures that will ensure adherence to all federal and state security and privacy laws, regulations and standards. These policies will include technology standards, protocols for the design, development, implementation and enhancement of IT systems, procedures for handling and safeguarding data (e.g. IRS Publication 1075 for Tax Information Security Guidelines For Federal, State and Local Agencies) and the process for record keeping and self-audits. Documentation and training on these policies as well as management of externally available attestations and audit reviews will be formalized to ensure the highest level of compliance in a manner that supports effective but secure data processing. Maryland will appoint a chief security officer within the Exchange whose role will be to ensure that these policies are developed, maintained and adhered to throughout all development, maintenance and operational activities. Performance Optimization, Sharing and Reuse: Maryland, through NAS and its partners, has procured a core HIX system that is inherently flexible, configurable, scalable and extensible due to its adherence to open standards and SOA design principles. Coupled with an orchestration platform built for distributed processing, high throughput and efficient and secure messaging, the systems architecture will allow the HIX solution to grow in terms of volume and new functionality without sacrificing reliability or performance. All these features have positive ramifications to sharing and reuse opportunities. As an Early Innovator grantee, Maryland has already shared many documents and SDLC artifacts with other states through CCIIO s collaborative learning environment (CALT) and through direct collaboration with other states. These documents range from business requirements, process flows and wire frames to procurement templates, architectural guidance and test scenarios. Moving forward, Maryland intends to work with CCIIO and other states to promote reusability and shared services via a structured framework that catalogs all technical components by type (e.g. end-to-end system, business service, standardsbased integration service, data service, rule set, etc.), description and appropriate usage. Attributes of catalog components will include opportunities for extensibility to new requirements and pre-requisites such as COTS licenses and other infrastructure hardware and software. Through this framework, Maryland can work with other states to identify which technical components across federal and state systems lend themselves to reuse and how that reuse will be accomplished both from a technical perspective (e.g. public and private web services registries) and a business/legal perspective (e.g. memorandums of understanding, contracts, etc.) Additionally, as Maryland makes progress on meeting its own certification requirements, opportunities for cloud-based hosting or shared services obtained through joint procurements may arise. Level Two Page 22

23 Establishment grant funds will be used to further build this reuse and shared services framework and support its implementation where cost efficiency goals for the entire Exchange system can be realized. vii. Financial Management Due to the known and anticipated complexity of financial operations within the State, the Director of Operations for the Exchange completed an analysis, with the support of an experienced consultant, to identify best practices, recommend internal financial systems, ensure sound internal controls and grant tracking and assist with budget preparation. Based on this analysis, the Exchange decided to utilize the State s systems. Through DHMH s Division of General Accounting, the Exchange will have access to the state-based systems for accounting and procurement. The Financial management Information system (FMIS), Relational Standard and Accounting Reporting System (R*STARS) and Advanced Purchasing and Inventory Control System (ADPICS) will be the systems of record for the Exchange. An MOU has been established with DHMH s Division of General Accounting to support the Exchange with these systems. With the systems identified, the Exchange will need to hire a full-time Fiscal Administrator to manage the budget, accounting and grant responsibilities. The Exchange and DHMH s Division of General Accounting will follow the State s Accounting Procedures as outlined in the Accounting Procedures Manual. Level Two Establishment funding is requested to support any costs associated with the MOU with DHMH s Division of General Accounting, as well as additional personnel to include an Agency Budget Specialist and Procurement Manager. The Exchange is confident that by using the state s FMIS and general accounting practices, proper and capable financial management systems are in place to manage the Exchange financial functions. The Exchange Board treasurer provides ongoing financial oversight including budget review. The Director of Operations will provide day-to-day oversight and ensure requested HHS accounting reports are provided. A financial management assessment will be conducted to determine if the financial management structure as outlined above is sufficient to support the Exchange s long term financial sustainability model that will be finalized by the legislature in early In examining the Exchange s operational and financial capabilities, it was also necessary to analyze the Exchange s back office operations, including human resources, general services, procurement, information systems and payroll. After review of the options, the Exchange decided to also use DHMH for payroll and accounting services including accounts payable and accounts receivable, as well as training. viii. Oversight and Program Integrity The Exchange recognizes the importance of preventing fraud, waste and abuse and is required by statute to present the fraud, waste and abuse plan to the House Health & Government Operations Committee and Senate Finance Committee, the two health policy committees in the Maryland legislature, by December 1, The Maryland Health Benefit Exchange Act of 2012 requires the Exchange to establish a full-scale fraud, waste and abuse detection and prevention program designed to ensure compliance with federal and state laws, as well as promote transparency, credibility and trust on the part of the public. The program must establish a framework for internal controls, identify control cycles, conduct risk assessments, document processes and implement controls. Wherever possible, the Exchange has been and will continue to look toward existing, proven infrastructure, to meet requirements and to build credibility as an organization. The Office of the Inspector General (OIG) protects the integrity of the fraud, waste and abuse program and acts as a source of objective, relevant and reliable information in assessing the business practices of internal and external customers. Its mission is to protect the integrity of DHMH and promote standards that benefit the citizens of Maryland and program beneficiaries. The OIG oversees the corporate compliance program for all agencies within DHMH and several agencies outside of DHMH. Through this program, the OIG ensures all required training is completed, including HIPAA and fraud, waste and abuse. The OIG also serves as the main point of contact for state and federal audits, supporting specific agencies on these responses, and conducts internal audits on a regular basis to ensure compliance within DHMH. Additionally, the OIG investigates Medicaid fraud for both providers and members, and audits for waste and abuse within the system both internally and externally. The department currently has MOU s with several other Page 23

24 quasi-government entities similar to the Exchange, such as the MHCC and the HSCRC, to run their corporate compliance program and to assist in audit proceedings. Because of the proven track record both internally and with other agencies, the synergies between the department and the needs of the Exchange, the Exchange and OIG have begun MOU development for the OIG to manage the Exchange s corporate compliance. Additionally, the Exchange is working with OIG to further understand the possible economies of scale and synergies between the external fraud department functions to determine how the specific needs of the Exchange could be incorporated. Discussions have begun to establish the specific needs of the Exchange. This partnership enables the Exchange to ensure immediate oversight of current activities, and to work toward a solution for operational oversight beginning in October With Level Two Establishment funding, the Exchange will employ a Compliance Officer, whose job it will be to establish the framework for internal controls, identify cycles, conduct risk assessment and document processes as defined by statute. Additionally, this person will lead the effort to develop the ongoing fraud, waste and abuse programs for individuals entering the exchange and when the exchange becomes operational. This person will also lead the efforts with OIG to maintain consistencies and realize economies of scale as appropriate. As stated above, all decisions on this will be reviewed by the legislature before the program is fully implemented. The Exchange recognizes the importance of a robust, transparent process to gain credibility within the state and will take the appropriate actions to meet those expectations. ix. Health Insurance Market Reforms The Maryland Insurance Administration (MIA) will review the various laws impacting health benefit plans found in the Insurance Article and the Health-General Article to determine which need to be amended or repealed in order to comply with the new requirements of the Affordable Care Act that go into effect in A major legislative bill will be prepared for the 2013 Maryland legislative session, so that the necessary amendments can be made in a timely manner. Additionally, the MIA will implement provisions of a rate review bill signed by Governor O Malley on May 22, 2012 that clarifies and codifies the rate filing and approval process for health insurance carriers by applying the same review standards to health insurers, nonprofit health service plans and health maintenance organizations. The MIA continues to enhance the rate review process and provide transparency to consumers through implementation of the recommendations put forth by the Oliver Wyman reports 11 in May of For example, after recently signing MOU s with both the Maryland Health Care Commission and the Health Services Cost Review Commission, the MIA will begin to implement data transfer procedures with these state agencies in order to have a more robust data set available for benchmarking purposes. x. Providing Assistance to Individuals and Small Businesses, Coverage Appeals and Complaints While the online portal will provide a seamless entry point for individuals to determine eligibility for Medicaid and other public assistance programs, tax credits and cost-sharing subsidies, many people will require direct assistance through a variety of other mechanisms as required in Section 1311 of the ACA. The Exchange will provide assistance through a toll-free call center and navigators will assist individuals and small businesses statewide with outreach, education and enrollment. Both the Consolidated Service Center (CSC) and navigator program are explained in detail in the Business Operations section. As set forth in Sections 1311(d)(4) and 1413 of the ACA, the Exchange will establish an appeals process for findings and determinations related to the decertification of qualified health plans; individual eligibility for advanced premium tax credits (APTC) and cost-sharing subsidies; eligibility for exemptions from the individual responsibility requirement; employer eligibility 11 Recommendations to the Commissioner To Enhance Regulatory Review and Oversight : and Recommendations to the Commissioner on Information Provided to Consumers : Page 24

25 to purchase on SHOP Exchange; and employer responsibility for employees determined eligible for APTC. The Exchange will create an Appeals and Grievances Unit that manages and resolves the full range of appeals that will result from adverse determinations. To achieve this, the Exchange anticipates the need to hire additional attorneys to prepare appeals and represent the Exchange at administrative hearings and support staff to manage the Appeals and Grievances unit. Policies and procedures will be adopted once a plan is finalized. The Exchange will work with Medicaid on business processes to ensure adequate consumer protections for households where the parents might be enrolled in the Exchange, and the children enrolled in Medicaid or CHIP and the entire household is appealing an eligibility determination. Moreover, the Exchange will work with Medicaid on business processes if the underlying appeal that is presented to the Exchange involves an initial determination that an individual or household was found to be Exchange-eligible, but seeks to be determined Medicaid-eligible instead. As it continues to assist health care consumers in appealing carriers adverse decisions related to their health care coverage as required by Maryland s Appeals and Grievances law, HEAU will begin to work with the Exchange to ensure that new insurance customers will receive pertinent information regarding consumer protections and appeal rights. The HEAU and the Exchange will develop a plan for meaningful assistance to individuals appealing health insurance decisions, utilizing multiple access points and leveraging existing resources to expand current capacity to accommodate the expected increase in consumer call volume. It is expected that HEAU will provide training to Exchange personnel and supporting teams about HEAU s operations, will design training curricula and materials about consumer protections pertaining to appeals and grievances for the Exchange, for consumer advocates, for health care professionals and for consumers, and will educate consumers about the ACA and its implementation in Maryland. HEAU and the Exchange anticipate entering into a Memorandum of Understanding that will identify their obligations, responsibilities and common goals, and serve as a road map for reaching those goals. xi. Business Operations As outlined below, the Exchange requests Level Two Establishment funds to support the following business operations for the full implementation of a state-based exchange in Maryland in accordance with the ACA: Certification of Qualified Health, Dental and Vision Plans The Maryland Health Benefit Exchange Act of 2012 provides the Exchange with the authority to define qualified health plan (QHP) and qualified dental plan (QDP) certification requirements above minimum standards established by the ACA and to offer qualified vision plans (QVP) from stand-alone vision issuers, which is not a requirement of the ACA. The following diagram provides an overview of the QHP/QDP/QVP certification process the Exchange is currently developing. The final certification, decertification and recertification process will be established through a formal, public process by September 30, The Exchange plans to utilize National Committee for Quality Assurance (NCQA) and Utilization Review Accreditation Commission (URAC) accreditation standards for certification. Additional accrediting entities will also be added with guidance from HHS. Since Exchange-specific accreditation will not yet exist, either commercial or Medicaid accreditation will be accepted through Beginning in 2016, Exchange-specific accreditation may be required. Page 25

26 Beginning in April 2013, the Exchange plans to begin reviewing issuers accreditation status for the upcoming benefit year. For non-accredited plans, the Exchange plans to allow a one-year grace period for 2014 only. In the accreditation review that will be performed in April 2014 for the 2015 benefit plan year, the Exchange plans to require all issuers to have accreditation by one of the authorized entities. If accreditation is not obtained or substantial progress cannot be demonstrated by April 2014, the Exchange could opt to decertify plans offered by that issuer. There are no accrediting entities for dental and vision plans, therefore, until such time that an accrediting entity becomes available, the Exchange plans to accept the MIA Certificate of Authority for dental and vision plans. Network Adequacy The Exchange is performing research on network adequacy standards. The Exchange recognizes the important role of Essential Community Providers (ECPs) and will require issuers to include ECPs as a safety net as a means to improve access to care for enrollees. Stand-alone dental and vision issuers will develop network adequacy requirements specifically for those plans. The Exchange is requesting Level Two Establishment funds for network adequacy software to monitor issuer networks, compare networks across issuers, and report on accessibility of providers to the Exchange population. The Exchange will continue to consult with the NAIC, NCQA and Connecture, the Exchange s IT vendor for the consumer portal, to review options for receiving certification data exchange and the workflows that will be needed to support certification processes. Decisions will be made with input from the Exchange Implementation Advisory Committee and the Plan Management Advisory Committee, both of which are open meetings. The Exchange Plan Management staff will be tasked with managing all functions associated with plan certification including ensuring collaboration with outside entities to support this function. Transparency Data: Issuers will be required to provide ACA transparency data as part of the certification process. However, some of the required data will not be available until consumers are enrolled in plans and have received health care services. Therefore, the Exchange proposes to segment the transparency data requirements: (1) Requirements for 2014 and beyond would include claims payment policies and practices, financial disclosures and information on enrollee rights; (2) Requirements for 2015 and beyond would include: data on enrollment/disenrollment; the number claims denied and rating practices; information on cost-sharing and payments with respect to out-of-network coverage; and information on cost-sharing with respect to a specific item/service upon request of an individual. Disparity Data Collection: The state of Maryland is dedicated addressing health disparities within the state. Championed by Lieutenant Governor Anthony Brown, Maryland passed the Health Improvement and Disparities Reduction Act of 2012 (Senate Bill 234) 12. The recently enacted Health Disparities law establishes Health Enterprise Zones and requires health carriers to report on disparity data. The Exchange has been collaborating with the DHMH Office of Minority Health and Health Disparities to identify how research on health care disparity measures and variations in quality and outcomes for health plans can be incorporated into certification policy. Recertification and Decertification of Qualified Health, Dental & Vision Plans The Exchange is working to develop its recertification and decertification policies for issuers and qualified plans utilizing the same open stakeholder process that will be used for developing certification criteria. The EIAC and other subject matter experts will be engaged to create a draft recertification/ decertification policy. The Plan Management Advisory Committee will 12 Maryland General Assembly, Maryland Health Improvement and Disparities Act of Page 26

27 be engaged to review the draft policy for a broader set of perspectives. A formal comments period and the state s AELR process will be leveraged to ensure the public also is given the opportunity to provide input. Call Center The Exchange recognizes the integral role the Consolidated Service Center (CSC) plays in the success and sustainability of an exchange, as it may serve as the main entry point for any question pertaining to the Exchange, Medicaid eligibility, enrollment, health care reform and/or any other question pertaining to health insurance. Therefore, integrating with Medicaid and other programs in the state is essential. The CSC will utilize best practices where the consumer experience is consistent and continuous, regardless of the question being asked for the reason for the call. The vision is to adopt a centric model (shown below) that includes the CSC at the central hub in order to provide seamless application support and services. The Exchange recognizes that this may not always be achievable and is therefore working closely with other agencies including Medicaid, DHR, MIA, HEAU and others to determine how best to address questions that must be addressed. For example, questions pertaining to SNAP and/or TANF will need to be addressed by DHR. A cross-functional team including operations and IT experts from each agency are working to outline the appropriate solution. To execute this strategy, the Exchange will pursue a contracted approach. Level Two Establishment funding is requested to support engagement with two vendors. The Exchange will need to engage a consultant to develop call volume projections, author the CSC RFP, model the estimated launch and run costs and pricing impacts, assist with negotiation, optimize contractual terms, assist with vendor selection and the development of a vendor management strategy and provide ongoing project management support throughout implementation. A CSC vendor will provide all call center services including the operation of a toll-free telephone hotline, resources and personnel to support ongoing operations, translation and oral interpretation services and fulfillment services to send notices and outreach and educational materials. The CSC will be prepared to manage calls from individuals, employees, employers, brokers, navigators, assisters, community-based organizations (CBOs), issuers and others who may call on behalf of individuals. The CSC will be prepared to manage questions ranging from general inquiries to appeals, including but not limited to: applications, APTCs, CSRs, the individual mandate, employer requirements, small group tax credits, employer responsibility and health care reform. The CSC solution will be also support web-chat and walk-ins as necessary. The CSC will be open and staffed prior to open enrollment to support Marylanders as the outreach and education campaign begins. As part of this solution, it is expected that the Medicaid enrollment broker functions be rolled into the CSC. Once the CSC vendor is hired, the Exchange will ensure that an ongoing training program is developed and maintained, scripts are developed, CSC policies and procedures are defined, quality measures are established and continual vendor monitoring and oversight is provided. This will require ongoing program integration between all affected state agencies. Exchange Website Maryland s online marketplace for individuals and small businesses is in development and expected to achieve certification by January 2013, providing a user experience that is consumer-friendly and meets all applicable ACA requirements. NAS and the COTS vendors, Curam and Connecture, are incorporating the final UX2014 design recommendations to ensure that the visual and information design of the site provides applicants and enrollees with the support necessary to understand the application process, eligibility determination and enrollment procedures. The website will meet standards for accessibility and limited Page 27

28 English Proficiency with translation available. All content developed for the site will undergo a rigorous Plain Language review process to ensure compliance with readability standards. The website will feature the required calculator for individuals to quickly measure out of pocket costs based on individual income and household size as defined by the ACA. The HIX will also feature tools and administrative functionality for internal collaborators such as intake workers, eligibility workers and administrators to maximize case management capabilities and ensure seamless integration with other state programs. Exchange partners, including navigators, employers, plan issuers, brokers and providers will have access to specific areas of the HIX to perform functions. The Exchange will provide timely training for all partners and stakeholders in 2013 prior to the launch of the website. As the Exchange finalizes its brand development process in September 2012, a style sheet will be developed followed by the design of the customized home page and subsequent landing pages for the HIX with the COTS developers. Final design and usability features will be defined by consumer needs and refined by user testing throughout the development schedule as outlined in the IT Systems Section above leading up to open enrollment in October Premium Tax Credit and Cost-Sharing Reduction Calculator A key requirement for the Exchange will be to determine eligibility for advance premium tax credits (APTC) and cost sharing reductions for those individuals who qualify for them based on their modified adjusted gross income (MAGI) in relation to the federal poverty level (FPL). Maryland's core HIX system will allow individuals to anonymously get estimates of the APTC and cost share reductions based on general demographic information entered in the system. A formal determination of APTC and cost-share reduction will be provided once the user has created an account and their identity has been authenticated. The tax credit calculation will be performed in conjunction with web services provided by the federal data hub and the IRS. Individuals applying by other methods (in-person, mail, phone, etc.), authorized assisters such as navigators will be able to invoke the proper electronic calculators to achieve a similar result. Tax credit and cost share eligibility will be stored in the HIX database for audit purposes and shared with insurance carriers to ensure that individuals receive subsidies reflected in monthly premium payments. The system will also allow individuals to specify a smaller APTC to avoid any potential outstanding tax liability at the end of the year due to income changes. Quality Rating System The quality rating system will be made of up several parts. Laid out below are the proposed plans for quality rating; this plan will be finalized through the EIAC, the Plan Management advisory committee and a formal public process. Quality Data: The Maryland Health Care Commission (MHCC) created one of the nation s first comprehensive health benefit plan report cards, leveraging both the Consumer Assessment of Health Providers and Systems (CAHPS) data from the Agency for Healthcare Research and Quality (AHRQ) and Healthcare Effectiveness Data and Information Set (HEDIS) from NCQA. Given this vast experience with quality measurement and reporting, the Exchange is working with the MHCC on existing quality review processes that can be adopted for the Exchange. The Exchange will establish an MOU with the MHCC to collect and provide quality data for commercial health, dental and vision plans as a proxy for QHP, QDP and QVP quality and continue its work with the MHCC beyond 2014 to refine the process and move forward with collecting specific quality and performance data on QHPs, QDPs and QVPs being offered in the market. Collection of Certification Data: The collection of issuer certification data is a key consideration; the Exchange is currently exploring three options for receiving issuer data for qualified plans. A preliminary analysis of the commercial market shows that five of the six major health plans in Maryland are NCQA accredited, while none of the Maryland plans are URACaccredited. Given that NCQA accreditation is dominant in Maryland, the Exchange has started discussions with NCQA about options for obtaining accreditation data. Page 28

29 Navigator Program Building on policy decisions initiated during the advisory committee process in 2011, the Exchange, working directly with community-based organizations, consumer advocates and brokers throughout Maryland has developed a navigator program that supplements the market, rather than replaces it. The MIA assumes a vital role as the enforcement agency for the navigator program. Due to the fact that the individual and small group markets are separate in Maryland, there will be two separate navigator programs as well. Below is a chart outlining the different programs: Individual Navigator Program SHOP Navigator Program Broker Overview Responsible for outreach to uninsured individuals Responsible for reaching out to uninsured groups Navigators can present only plans inside Can present only plans inside exchange exchange Only licensed navigators Only certified navigators can support plan selection can discuss tax subsidies and support plan selection or speak about specific Assisters can support appropriate impacts of APTCs outreach and anything Assisters can support leading up to tax subsidy / outreach and anything plan selection discussions exchange leading to plan selection and/or individual subsidy discussions Certification/ Authorization Individual navigators receive certification from Exchange Navigator entities receive authorization from the Exchange Individual navigators must work for a navigator entity to be recognized Must receive navigator license from MIA (different from a broker license as it is limited to the presentation of plans only inside the exchange) Enforcement MIA MIA Exchange Responsible for maintaining the existing market and introducing individuals and groups to plans in the exchange as Can sell both inside and outside Will be paid directly by carriers Must receive authorization from Exchange Training Program Developed by Exchange Focused on subsidy, QHPs and Medicaid training Developed by MIA Focused on tax credits, QHPs and small business programs Developed by Exchange Focused on subsidies and tax credits, QHPs The Exchange has worked very closely with Medicaid and DHR to define the roles of navigators with respect to the existing case managers within the Local Health Departments (LHDs) and Departments of Social Services (DSSs). Functions within these state and local departments will remain the same and individuals may enter at any point in the system and receive the same determination. Navigators will supplement these workers to support QHP selection and enrollment. In the next several months, the Exchange will be working with a new Navigator Advisory Committee to finalize the procurement strategy for navigator entities, further define the specific roles individual navigators will play outside of open enrollment, and provide input on the training plan to ensure: 1. All coverage options are presented equally 2. Culturally diverse populations are reached and communicated to appropriately 3. Continued education is delivered 4. Tax credit calculations and implications are clearly understood 5. Individuals are not harmed Page 29

30 Eligibility Determinations for Exchange Participation, Advance Payment of Premium Tax Credit, Cost-Sharing Reductions, Medicaid Maryland plans to use the HIX to evaluate eligibility for affordability programs using a no wrong door approach, including eligibility for exchange coverage, advance premium tax credits (APTC), cost-sharing reductions (CSR), Medicaid for families, children and non-disabled adults (i.e., MAGI Medicaid ), and CHIP. (Note that in future stages of HIX development, Maryland intends to use the HIX also to evaluate Medicaid eligibility for seniors and people with disabilities and other social services programs.) Leveraging the assistance of our federal partners, the HIX will provide consumers seeking coverage and financial assistance with an eligibility determination for the aforementioned programs that dynamically addresses changes in circumstance and qualifying life events. Additionally, the HIX will allow consumers to accept the advance premium tax credit in whole or in part, and to receive certification from the Exchange of eligibility status and/or individual exemption based on qualifying circumstances. While the HIX, a web-based solution, will be the system used to evaluate eligibility, consumers will be able to submit application to it via a variety of means (i.e., on-line, by phone, in-person). In addition, Maryland will have the capacity to accept and process mail-in applications. Individuals will be able to secure application assistance from a caseworker, navigator, or call center employee. Once eligibility determinations are made, enrollment into health plans will be facilitated by the HIX, caseworkers or navigators working directly with consumers in person, online or by phone. The process will start with an online shopping experience that consumers may use to review plan choices, compare, and make informed decisions about the plans available to them. This list of plans can be expanded and explored based on key factors such as price, quality, provider network and service, among others. The portal will meet ACA requirements for calculating subsidies and presenting to consumers individual payment responsibilities for the plan choices under consideration. Seamless Eligibility and Enrollment Process with Medicaid and Other State Health Subsidy Programs As noted above, Maryland will be using its HIX to conduct unified eligibility determinations for all affordability programs, including Medicaid and CHIP. To support this effort, it has established a state-wide eligibility and enrollment workgroup as part of an overall governance structure for the HIX implementation that facilitates decision making across all stakeholder agencies within the state including the Exchange, DHMH, DHR, MIA, and DoIT. Made up of both operations and IT experts, this group is charged with developing the process by which eligibility determinations will be performed. Its work includes determining how to gather the information needed for eligibility determinations from consumers in the least burdensome way possible (e.g. using electronic verification of data whenever possible), identifying the best way to take advantage of and integrate the Federal Data Hub into the eligibility determination process, and assessing how federal data will be married up with state data sources (e.g. vital records, motor vehicle registration, and foster care) to allow for simple, streamlined eligibility determinations. Through this process, the state will be able to determine if individuals qualify for affordability programs, including Medicaid and CHIP. As with individuals who qualify for Exchange coverage, Maryland intends to use the HIX to allow Medicaid and CHIP-eligible individuals to select and enroll in a Managed Care Organization (MCO) plan. While the ACA does not require that the HIX offer this function, Maryland policymakers are committed to providing Medicaid and CHIP beneficiaries with an experience comparable to Exchange participants. As a result, the HIX will present plan options for Medicaid and CHIP beneficiaries and facilitate enrollment into coverage. For many beneficiaries, a key factor in plan selection will be whether their provider participates in any given plan. Currently, Maryland s health information exchange (HIE) named Chesapeake Regional Information Systems for Patients (CRISP) has a database of all providers within the state. The Exchange will work with CRISP to provide the provider search capability on the HIX. Through technology provided through CRISP, the HIX will provide a complete database of licensed providers that will enable the individual to search for providers based on QHP, geography, specialty or other entity affiliation. The Exchange is asking for funds to enhance the current CRISP database to support the provision of updated, accurate information on provider participation by health plan. Page 30

31 Enrollment Process Enrollment in selected plans, whether managed care or commercial insurance plans, will be accomplished through the HIX. For purposes of Medicaid and CHIP, the HIX and, in some instances, caseworkers will work with Medicaid and CHIP recipients to ensure that they have established eligibility prior to enrollment into an MCO. On the commercial side, the HIX will notify consumers of the APTC amount, if eligible and send enrollment information to the appropriate issuer.. Once the initial payment has been received in full by the selected insurance carrier, both the HIX and the issuer will provide confirmation to the consumer of the health coverage effective start date. Maryland expects to complete implementation of the core eligibility and enrollment systems, including the online portal, and to have set up and trained internal staff, navigators, case workers and other stakeholders on the use of the system prior to the first open enrollment period in October The Exchange intends to use an integrated outreach and education strategy. A study conducted by the Hilltop Institute estimates that more than 145,000 individuals by the end of 2014 (up to 274,000,000 individuals by the end of 2015) many with significant premium and cost-sharing subsidies, will leverage the HIX for enrolling in affordable health coverage. Applications and Notices While it has not yet been released, Maryland, in general, is anticipating that it will use the model online application that is being developed by HHS to gather the appropriate information from consumers. The processing of the application will be rules-based and will provide the State with the opportunity to leverage additional federally supported services (e.g., the IRS s APTC Calculator and, if it becomes available, a federal services to assess access to affordable employer sponsored coverage). All notices pertaining to eligibility, coverage terminations or redeterminations will be sent out in both an electronic and physical form, by the HIX based on automated system logic and receipt of the appropriate qualifying event. Electronic notices will be disseminated in the form selected by the consumer (i.e. , text) while physical notices will be handled through an automated documentation management and delivery system inherent within the HIX. The Exchange will work closely with DHMH to review applications and notices to ensure compliance with federal requirements. Individual Responsibility Determinations As of the time of submission of this grant request, the federal government has not yet released any detailed guidance on how Exchange should implement the requirement to conduct individual responsibility determinations. The Exchange, however, is aware that it has responsibility for this function and it has developed high-level business requirements for its HIX that make it clear the system will have this capacity if needed. As more federal guidance becomes available, the Exchange will address the details of how individual responsibility determinations will be conducted. If the federal government is able to conduct individual responsibility determinations on behalf of state-run Exchanges, Maryland will carefully weigh the pros and cons of taking advantage of this service and make a decision at the appropriate time. Administration of Premium Tax Credits and Cost-Sharing Reductions The HIX will provide to HHS the information it needs to begin, end or change an APTC or CSR, as well as provide such information to the appropriate QHP carrier via electronic reporting and reconciliation. This information will include the dollar amount of the APTC and the CSR eligibility category. Moreover, the HIX will alert HHS if an enrollee is found eligible for an APTC or CSR due to a lack of access to affordable employer-based coverage that meets minimum value standards, as well as to report changes in an enrollee s employment situation. If someone terminates coverage, the HIX will alert HHS and the employer. Maryland plans on leveraging the services being developed by the IRS for the actual calculation of the maximum APTC and, as more information becomes available and may take advantage of the federal government s offer to evaluate APTC and CSR eligibility for state-based exchanges. The HIX will provide the Exchange with the necessary reports to satisfy the requirements set forth by HHS and the Treasury for reconciliation of APTC amounts disbursed with those allowed based on tax returns (see details below). The Exchange will work intimately with the MIA in reviewing the reasonableness of prepayments to carriers accompanying CSRs while providing the IRS with the information necessary for reconciliation with impacted carriers. Furthermore, the HIX will have a direct interface with the federal data hub and will have the ability to send the aforementioned reports automatically at a frequency determined sufficient by HHS. Page 31

32 Adjudication of Appeals of Eligibility Determinations As set forth in Sections 1311(d)(4) and 1413 of the ACA, the Exchange will establish an appeals process for findings and determinations related to the decertification of qualified health plans; individual eligibility for advanced premium tax credits (APTC) and cost-sharing subsidies; eligibility for exemptions from the individual responsibility requirement; employer eligibility to purchase on SHOP Exchange; and employer responsibility for employees determined eligible for APTC. The Exchange will create an Appeals and Grievances Unit that manages and resolves the full range of appeals that will result from adverse determinations. To achieve this, the Exchange anticipates the need to hire additional attorneys to prepare appeals and represent the Exchange at administrative hearings, and support staff to manage the Appeals and Grievances unit. Policies and procedures will be adopted once a plan is finalized. Notification and Appeals of Employer Liability The HIX will notify HHS (as noted above) and employers when one or more employees is determined to be eligible for an APTC or CSR because the employer does not offer minimum essential coverage, provides minimum essential coverage that is not affordable, or provides coverage that fails to meet the minimum value requirement. The HIX will have the ability to provide the notification utilizing an electronic medium if the employer is registered within the HIX in addition to the mailed notification. For employers not registered within the HIX, the notification will be delivered via a letter addressed to the last known address associated with the employer based on state sources. Both the electronic and mailed notification will identify the employee, indicate that the employee has been found eligible for an APTC, and indicate if the employer is thought to have more than 50 employees and, thus, it may be liable for a penalty. The HIX also will explicitly define the appeals process that the employer has the opportunity to pursue with the appropriate points-of-contact. The HIX will provide any data and reports necessary to support the notification and appeals of employer liability process with all necessary sources, time stamps and amounts. Information Reporting to IRS and Enrollees The Exchange will report to the IRS all of the information required to conduct reconciliations, including the premium of applicable benchmark plans used to compute the APTC; the premium of the plan in which the taxpayer (or family member(s)) enrolled; the aggregate amount of APTC provided; identifying information about the taxpayer (e.g., SSN) and other people insured under the plan; and any other data needed to assess eligibility for an APTC or CSR that the IRS requires. All of this information will be provided to the IRS in a timely manner, as specified by the IRS. The HIX also will automatically send all notices and other pertinent information to enrollees when appropriate. The Exchange will report all Exchange-related information to the IRS in a timely manner. The HIX will automatically send all notices and other pertinent information to enrollees when appropriate. The Exchange s website will present information regarding health plans in a clear, transparent fashion such that enrollees can access and comprehend items such as quality ratings, provider networks and MLR information. Outreach and Education A market analysis and environmental scan conducted in November 2011 provided the audience segmentation and prioritization necessary to develop plans for a communications and outreach campaign in advance of open enrollment in October The Exchange continues with plans to develop a comprehensive and integrated communications and marketing campaign to educate and inform individuals and small businesses statewide about the state-based exchange beginning in late 2012 and building through the first open enrollment period in March Outreach, education and communications activities will continue throughout 2014 to further educate individuals and small businesses about circumstances and life events that impact eligibility, special enrollment periods, appeals and grievances and health literacy topics. The Exchange engaged Weber Shandwick to develop a brand identity for the online portal and provide the foundation for the advertising, public relations and outreach campaign. A complete brand identity including name, logo and style guide is expected to be complete by August The Exchange requests Level Two Establishment fund to support the following communication, outreach and education activities through 2014: Page 32

33 Earned Media: The public relations program will be developed and launched during the third quarter of 2012, serving as the catalyst for the earned media campaign to support education and outreach with various key audiences. The public relations campaign will first serve as the foundation for developing the message infrastructure for the communications campaign, providing important assets for collateral development and partnership efforts. The public relations program will include proactive media relations strategies to garner awareness for the exchange development, open enrollment, navigator training and other pertinent topics. The campaign will utilize various public relations strategies to garner media coverage, including news generation, storytelling, social media, thirdparty endorsements and instructional /educational editorial placements. A public relations firm will provide the Exchange with the resources and expertise necessary to reach audiences in rural, suburban and urban communities through a variety of communication channels at a level necessary to create and maintain a level of awareness, interest and motivation to achieve enrollment objectives. Paid Media: A compelling paid media campaign will be developed to educate Marylanders about the exchange in advance of the October 1, 2013 open enrollment period. Based on formative research, initial plans include television, radio, transit and online advertising. Print advertising may be considered for small business target in the SHOP exchange. A multi-channel social media campaign will launch in early 2013 with content and strategies designed to support enrollment objectives. A Social Media Specialist will be recruited to monitor all social media channels and address all eligibility questions, concerns, issues, etc. to ensure a successful program. Community Outreach: A multi-tiered community outreach program will ensure the Exchange successfully reaches populations statewide to provide important education and outreach material in culturally and linguistically appropriate ways. The Exchange will recruit two Outreach Coordinators to cultivate relationships with stakeholders and organizations, share resources and provide support. The Community Outreach Coordinator will specifically work with faith-based and communitybased organizations by identifying opportunities for collaboration, partnership and sponsorship. Activities including health fairs, speaking engagements, cultural events and community events are among the myriad of opportunities. The Corporate Outreach Coordinator will support partnership efforts to engage the larger business community through sponsorships, in-kind agreements and events such as promotions with grocery stores, pharmacies, tax preparation businesses, business trade associations and professional trade associations. Education and Training: An essential component of the assistance the Exchange will provide to individuals and small businesses originates in training and education. The Exchange will develop a comprehensive training program for all assisters as well as change management training for case workers currently doing Medicaid eligibility determinations. Based on input and decisions made during the Navigator Advisory Committee, the training curriculum for navigators will be developed in the first quarter of 2013 after a training vendor is engaged. Level Two funding is requested for the development of a comprehensive training program that supports electronic, in-person and web-based training, and for DHR-specific training and business process review. User Experience Design: The Communications and Marketing Division will work directly with the PMO and IT vendors to ensure a seamless integration of the Exchange brand, end user experience and usability standards with the UX2014 recommendations. All content developed for the site will be tested and vetted through an editing process to ensure compliance with ACA standards. Additionally, the Exchange is developing communications strategies through the HIX to communicate with enrollees including and text. Opportunities will be identified to integrate the advertising and social media campaign with the user experience through the HIX through storytelling, content sharing and social media. Page 33

34 The Exchange will release an RFP for a public relations and advertising vendor(s) in July Additional RFPs for independent contractors to provide additional services including graphic design, editing and translation services are expecting to be released in the third quarter of Level Establishment Two funding is requested to support the procurement of an advertising and public relations agency, graphic designer, Plain Language editor, professional writer and translation services. Risk Adjustment and Transitional Reinsurance The Exchange, in collaboration with the MIA, has completed an analysis to identify how Maryland can implement its risk mitigation program as a means to stabilize premiums and mitigate adverse selection for the Exchange in 2014 and beyond. Risk Adjustment: A recommendation made by the Risk Mitigation Steering Committee was approved in May 2012 by the Board of Trustees to defer the operation of the risk adjustment program to the federal government. This recommendation was based on the recognition of the federal government s existing risk models and expertise that could be leveraged in this area. Reinsurance The Steering Committee recommended that Maryland continue its research to determine how to most effectively operate the transitional reinsurance program. Three options were presented to the Board for consideration including a federal model, state model and a hybrid approach. The hybrid approach would use the base reinsurance program, and Maryland would develop a state-based wrap around program to supplement the federal program. The Board approved the recommendation to continue the study of the reinsurance program to determine which of these options will best suit market needs. Level Two Establishment funding is requested to support additional analysis and the implementation of a state reinsurance program. PCIP Transition Maryland s high risk pool, the Maryland Health Insurance Plan (MHIP), has been in place since 2003 and offers coverage to individuals who have been denied coverage by commercial insurers due to pre-existing medical conditions. MHIP currently enrolls 20,500 members with an average loss ratio of 207% as of May, Additionally, MHIP manages the federal high risk pool. As of March 2012 Maryland currently covers 908 individuals through the Pre-Existing Condition Insurance Plan (PCIP) and expects to cover 3,500 Marylanders by January of 2014 through the PCIP program. The loss ratio of these members is currently 571%. Approximately 10% of the PCIP population is below the 300% FPL, meaning they will be eligible for subsidies through the exchange. All of these factors will be taken into consideration when the transition strategy is created. Page 34