States Prepare to Launch New Health Law Part 2

Crafting Exchanges

The health insurance exchanges will be online marketplaces where uninsured people can compare insurance policies, find out whether they qualify for either Medicaid or federal tax subsidies, and purchase insurance. The ACA allows states to either run their own health insurance exchanges, partner with the federal government, or let Washington run an exchange for them.

Insurance regulators in nearly every state began qualifying participating insurance companies and the policies they plan to offer starting in April. The process must be completed by July 31.

So far, California, Colorado, Maryland, Oregon, Rhode Island, Vermont and Washington have made public the names of the companies that have applied and their proposed policy prices. In every state, the new rates for individual and family policies on the exchange are expected to be higher than existing individual insurance policies. But because of new insurance company requirements in the ACA, the benefits for exchange plans in 2014 will be broader and there will be no caps on claims, making it difficult to compare them to today’s policies.

Fraud and Abuse

Stateline’s Legislative Review looks at policy and politics in the states since legislatures began their work in January. The five-part series will include analytical articles, infographics and interactives.

Every year, unscrupulous health care providers squander billions of state dollars by overbilling, filing claims for services that were never provided, or otherwise cheating the system. With millions of newly eligible beneficiaries and billions of federal dollars coming into state Medicaid programs next year, the authors of the ACA reasoned that opportunities for criminal activity would surge unless states increased fraud prevention efforts.

In addition to federal requirements, lawmakers in several states voted for additional anti-fraud measures this year. “Fraud fighters have to keep investing in new tactics and technology to stay one step ahead of the bad guys,” said Megan Comlossy, health expert with the NCSL.

Under the ACA, states are required to ramp up background checks on new health care providers and immediately suspend claims payments when there is a “credible allegation” of fraud. Arkansas, Florida, Iowa and Texas enacted laws defining what type of evidence is needed to make such a credible allegation.

The federal health law also calls on states to report doctors and other providers they have kicked out of their Medicaid programs. The list will be kept in a national database that includes the names of providers who have been terminated from Medicare. The database is intended to prevent crooked health care providers from simply moving from state to state or from Medicare to Medicaid.

In addition, the law provides federal money to states that invest in new technology designed to spot criminal activity before claims are paid. Arkansas, Colorado, Massachusetts and Texas this year approved new laws calling for investment in so-called “predictive modeling” software similar to what credit companies use to reveal patterns of illegal activity, according to NCSL.

Whether states can stop more criminals from siphoning money from Medicaid remains to be seen. The same goes for state efforts to attract more primary care providers to serve the newly insured and educational campaigns aimed at convincing low-income adults to sign up for tax credits.

One thing is certain: Though most state legislative sessions will be over by July, the work of implementing the ACA will go on for years.