Highlights from the First Batch of Exchange Establishment Grants

HHS recently awarded the first batch of Exchange establishment grants to Indiana, Rhode Island and Washington. The grant funds, larger than the initial forty-nine planning grants, and ranging from five million to twenty-two million dollars per state so far, are targeted to help states build Exchanges. The grant application requires states to address eleven core areas identified by HHS in which states are expected to carry out activities. Here at State Refor(u)m, we’ve completed an analysis of the grant proposals along these core areas, available here. We plan to expand this analysis as new proposals are approved.
Building an Exchange requires states to create a new program that draws on the expertise and functions of existing agencies and programs. One core area addressed in the grant proposals is how states plan to integrate other health coverage programs with the Exchange. While all three states are still in early phases of their work, the proposals offer process and collaboration tips that other states might want to borrow and adapt. Here are some highlights:

• Washington has begun to merge the Health Care Authority (HCA) with the Medicaid Purchasing Administration (MPA). This merger has assisted in the exploration of integration issues between the Exchange, Medicaid, and the Basic Health Plan option. Proposed future actions include:
  • Creating an internal working group of Medicaid and Exchange officials to better coordinate on overlapping issues.
  • Adopting a shared development approach between the Exchange and Medicaid.
  • Utilizing leadership overlaps between the HCA, MPA, and state IT initiatives.
  • Coordinating between Exchange staff and the insurance commissioner, especially on issues relating to qualified health plans, adverse selection, and information sharing.

• Rhode Island has created an interagency workgroup, jointly chaired by Medicaid and the Office of the Health Insurance Commissioner (OHIC), that meets weekly. OHIC and the RI Department of Health have signed a Memorandum of Understanding (MOU) for an Exchange reporting/evaluation project.  The state also issued a Request for Proposal (RFP) for an eligibility system assessment on behalf of both the Exchange and Medicaid. With grant funds the state plans to:
  • Develop business processes and system architecture needed to support Medicaid and the Exchange based on their IT gap analysis.
  • Develop an eligibility system RFP by October 2011.
  • Hire staff to support RFP development.

• Indiana, early on in planning efforts, established a Health Care Reform (HCR) Team, made up of representatives from state agencies and the Governor’s staff, that coordinates agency roles in Exchange development. IT and Medicaid Expansion groups also meet regularly to discuss Medicaid issues and integration with the Exchange. The state developed a preliminary analysis of the functions currently performed by various state agencies and future plans include:
  • Review existing business processes and develop new processes that will be needed for Exchange implementation.
  • Identifying strategies for “no wrong door” and adverse selection prevention policies.
  • Creating an agreement between the Exchange and the social services administration for operating procedures related to the Exchange and other state health subsidy programs.

The Maximizing Enrollment program released a report entitled Medicaid’s Role in the Exchange: A Roadmap for States that describes how states can build on Medicaid’s structure and experience in creating their Exchanges. As states work through issues related to integrating with Medicaid it might be a helpful resource.  We also drafted an earlier blog post in April on Medicaid’s role.
Is your state working on an Exchange establishment grant application? Please tell us about it by posting on your state page at State Refor(u)m or ask questions and share insights with other states.