At yesterday’s meeting, the Connector Board discussed the Commonwealth Choice Seal of Approval; approved the FY11 Commonwealth Care insurer procurement; and received information on CommCare enrollment. Meeting materials are here. We have some thoughts on the Commonwealth Care procurement, see our comments at the end of the full report.
Secretary Jay Gonzalez began the Connector Board meeting by asking Nancy Schwartz, filling in for Commissioner Murphy from DOI, to provide an update on what’s going on in the private insurance world.
Schwartz read a statement that provided background and a timeline on DOI’s recent action to disapprove 235 of 274 insurance rates on April 1st. DOI sent letters to carriers demanding that they: notify policy holders by April 11th of the rate disapproval; remove disapproved rates from invoices after April 1st; and provide policyholders with credits towards future premiums. DOI also asked carriers to repost their plans with 2009 rates by Friday. The Superior Court held a hearing Thursday on the request by a number of insurers for an injunction against enforcement of the order by the DOI denying rate increases.
Gonzalez brought the conversation back to Connector issues, and announced that he and Connector staff are going to review the process of determining the Affordability Schedule, with the plan to develop a consistent formula for determining the Schedule moving forward.
Jon Kingsdale began his Executive Director’s report by announcing Stephanie Crobak as the new CommCare Director. Ms. Crobak comes to the Connector with 20 years of experience in the health care world. Welcome, Stephanie!
Kingsdale also recognized the work the Connector, DHCFP, and Higher Ed folks did to improve the student health program. He noted that the state-community college joint procurement added a 15% value to the benefits. Kingsdale also updated the Board on Business Express’ progress during its first month. As of April 1, 1,075 employers have signed up, including 200 new employers who did not previously have accounts with SBSB. Business Express now has around 2,000 employers and 4,000 members.
Kingsdale commemorated the passage of the national health reform law. He said, “This law may not have been here if it wasn’t for the pioneering work in Massachusetts,” and he congratulated the Connector Board on their good work. Gonzalez commented, “We have our work cut out for us to reconcile the differences between what we have in MA and national health reform provisions.” Celia Wcislo requested that the Board spend some time at their next retreat discussing what national health reform means for the Connector.
Our detailed updates, and our special comment, are below the fold:
2011 Seal of Approval
Katilyn Kenney presented the goals, process, and timeline of the 2011 Seal of Approval process. SoA goals include: maintaining a simplified product structure; minimizing disruption and administrative burden; and transitioning SBSB accounts to Business Express. Dolores Mitchell inquired whether the Connector plans to offer the Tufts Limited Network plan as well as the Broad Network plan. Kenney responded that current members can renew the limited network plan, but new members will not be able to buy this plan. Mitchell encouraged the Connector to offer the Limited Network plan, acknowledging it as “one of the ways to get our arms around the cost monster.” She noted that plans should limit provider networks, not benefits.
This year’s SoA process is similar to last year’s. If a carrier is selected, as of 1/1/11, the carrier must participate in all product tiers (Gold, Silver, Bronze, YAP) and all product lines (non-group, YAP, Voluntary Plan, Business Express).
The Connector will issue a contract with a renewal letter, and carriers must respond by May 7th. Gruber asked if there is evidence on how the decision to simplify choice (out of focus groups last year) is working. Kenney responded that the Connector is in the process of convening groups to look at consumer responses. Turnbull commented that the standardized products are a good change, but there are still too many product choices. She would also like to better understand if the current number of choices is overwhelming for consumers. Mitchell added that the GIC discontinues offering plans if they don’t meet a certain threshold of members. The Board is expected to vote on the Seal of Approval either June 10th or July 1st.
FY11 CommCare MCO Procurement
James Woolman provided a summary of the FY11 CommCare procurement results. Woolman stated that the procurement was successful in meeting its goals:
- Maintain reasonable capitation rates: In order to bid, plans had to accept the $393.67 medical cap rate (at the bottom of the actuarially sound rate range), and could bid lower on the $32 administrative fee. The rates paid to each plan will be risk-adjusted for geography, benefit differences, and acuity. Aggregate risk sharing is reduced from 4% to 2%; if a plan incurs losses or gains 2% or higher the state’s share will be 50%. Plans will therefore be exposed to less risk, a decision mainly driven by the low cap rate. Gruber requested that the Connector study to compare the per member per month cost of CommCare members to another population – GIC, for example.
- Stay within budget: This procurement result provides an estimated $20.8 million in savings in FY11. There was some question as to whether that freed up room for enrollment growth or if the Connector managed to spend a chunk of this savings already (offsetting the Rx carve-out money).
- Maintain continuity of health plans: All incumbent health plans – BMC HealthNet, Network Health, Neighborhood Health Plan, Fallon Community Health Plan, and CeltiCare Health Plan – continue to participate. With the exception of Fallon pulling out of Northeastern and Southeastern MA), all plans will retain their current service area coverage.
- Enhance competition among plans: Three of five plans proposed discounts on the $32 administrative fee, with CeltiCare bidding over $20 below target. Mitchell asked whether the Connector used a standard definition of admin costs when determining whether the admin fee discounts plans propose are actuarially sound. Woolman responded that while there is not a standardized definition, each plan needed to provide details on their admin costs; there was a lot of consistency among plans on what is considered administrative.
- Protect members from large premium increases: The premium spread between the highest and lowest plans will drop by 20% from FY10. With a spread of $10-$49 on the high end, there will be an overall average increase of $6 for Plan Types II and III, and no increase for Plan Type I. This average assumes some member movement from their current plan to the lowest cost plan (CeltiCare). The differential in enrollee contributions is based solely on the administrative fee discounts. Assuming no change in membership, a third of Plan Types II and III members will see an increase of greater than $10/month. Some 10% of Plan Type III members (~8,000) will see a premium increase of $20 or more.
As a result of the bid responses, CeltiCare is the only lowest-cost plan in every area of the state.
Woolman presented CeltiCare’s basic network capacity. The network includes 40 of the 52 health centers in the state, which is comparable to other plans. However, CeltiCare has fewer participating PCPs and hospitals than other plans. Woolman stressed that CeltiCare has made a commitment to supporting patients with care transition if they need to change providers.
The Connector will continue to monitor the MCOs during this process by looking at member experience during open enrollment. They will initiate a member satisfaction survey, monitoring call center performance, keeping track of grievances, tracking premium payment behavior, and assisting plans with the NCQA/CAHP certification process.
Terry Dougherty asked how the Connector anticipates member movement. Woolman responded that it is based on FY09 data – 8-12% of members facing an increase changed plans during open enrollment. Based on this figure, the Connector anticipates up to 10% movement to the lower cost plan. This figure takes new members into consideration. Mitchell commented that GIC sees a 2% turnover rate year to year, and acknowledged that new members tend to take up the lowest cost plan.
Gonzalez commented that in the context of the budget hole, this was a very successful procurement: holding rates down, preserving benefits, maintaining commitment from the plans, lowering administrative costs, keeping enrollee contribution increases to a minimum. He also clarified that the $20.8 million budget savings is compared to what the costs would have been without competition on the admin fee, not compared to the Governor’s funding proposal in House 2 (which is a tight number). Gonzalez continued that it will be important to monitor the impact of the procurement on CommCare members, especially related to cost. The goal is to mitigate disruptions to the greatest extent possible, and learn lesson for next year’s bid.
Wcislo commented that every year the bid process has been a learning process. She stressed that continuity is important, and would like to know for the future how many people change plans; it is important to be cognizant of the consumer impact during the procurement process.
Mitchell stated that she wished she could have kept GIC member increases to CommCare levels. She expressed anxiety about CeltiCare buying into the market and wanted to ensure regulatory supervision over the product. Mitchell said it is important to get people to choose lower cost plans as long as they have adequate benefits and that consumers should be informed about what they are getting. CeltiCare needs to communicate up-front with members and potential members about what they are offering with regards to their network.
The Board voted unanimously to continue the FY11 CommCare procurement process as presented.
Commonwealth Care Quarterly Update
New Commonwealth Care Director Stephanie Chrobak and Niki Conte provided a CommCare enrollment update. Total CommCare enrollment has grown in the third quarter of FY10. There were 152,571 Commonwealth Care members as of March 1st; Bridge enrollment is 24,916. 48% of current CommCare members are in Plan Type I. 39% of CommCare members in all plan types have BMC HealthNet, followed by Network Health at 32%.
CommCare has begun auto-assignment for the approximately 10,000 eligible but unenrolled residents—1/3 of this population each month for the next three months. In all, 47% of the 2,671 April auto-assignments went to CeltiCare, followed by 33% to Network Health.
Chrobak was proud to announce that CommCare customer service call abandonment rates are well below the industry standard of 3%. The top reasons for calling continue to be enrollment/eligibility questions. Gruber commented that there continues to be a lot of churn within the CommCare program. He requested that the Connector look at redeterminations, and determine what happens to folks who fall off.
Next, Niki Conte presented the Board with 2010 CommCare open enrollment plans. Open enrollment is June 3-22; it is the one time a year the Connector sends communications to all CommCare members. The Connector developed materials with feedback from MassHealth Outreach grantees. Open enrollment posters are translated into 9 languages, and the Connector plans to communicate with outreach workers and CommCare members via email. The Connector will also send out individualized member packets to each member with customized instructions for changing plans.
Wcislo asked if they plan to increase customer service staff during open enrollment; Crobak responded that Perot will increase staff and the Connector will train them on what they need to know. Mitchell commented that the outreach staff need to be informed of the difference between CeltiCare and other plans. Turnbull asked how members find out if their provider is in a plan. Conte responded that members can do a provider search on the Connector’s website, call CommCare customer service, or call the health plan directly. Turnbull also asked if Fallon has an obligation to inform their members that they are pulling out of certain service areas; Crobak said Fallon will send a letter to their members. Wcislo suggested that the Connector to do “robo-calls” to remind members that they will be getting open enrollment materials in the mail. Gruber suggested that the Connector include a statement about the possibility of the premium increasing if the member is to stay on their current plan, and stating what the new premium will be.
With that, Jay Gonzalez called the Board into executive session to share an update on the AWSS lawsuit.
The next Connector Board meeting is scheduled for May 13th.
Comment: As a consumer advocacy organization, Health Care For All has a number of concerns about the result of the FY11 Commonwealth Care procurement process. CeltiCare—with a narrower network than other MCOs— will be the only lowest cost plan across the state, and members wanting to stay in their current plans may receive a significant increase in premiums. We worry that this puts economic pressure on low-income individuals and families to make important health coverage decisions based on price and not relationships with providers. As Celia said, there are always lessons learned in the ongoing implementation process. We want to ensure consumers have choice to meet their needs in affordable ways.