Fixing the ACA's ‘no wrong door’ feature

With the second open enrollment period for the Affordable Care Act healthcare exchanges fast approaching, health plan executives and industry observers are wondering if a little-noticed-but potentially serious-problem has been fixed: the exchanges’ lack of integration with state Medicaid systems. 

During the first enrollment period, the so-called “no wrong door” feature in the exchanges often did not work. As a result, many individuals trying to determine Medicaid eligibility before signing up for a commercial plan had to apply for Medicaid and be turned down before they could return to the exchange to buy a qualified plan. 

Some enrollees who signed up for Medicaid found that, upon seeking care, the system had no record of their enrollment or their coverage. Many state agencies responsible for Medicaid had to deal with new enrollments manually outside of the exchanges.

Preparing for 2015 

At this point it is unclear as to how many of these problems will have been addressed. Although Medicaid enrollment continues year-round, renewals and new enrollees are likely to tax the system. Moreover, the fluid nature of many Medicaid recipients’ income means that these individuals are likely to be moving back and forth between Medicaid and subsidized commercial plans throughout the year.

Similarly, it is also unclear how far along the state and federal exchanges are in ensuring the no-wrong-door feature is functioning properly. 

“The federal government is still working on the consumer part of the federal exchange and less on the back end to make sure it integrates with state Medicaid programs,” notes Kristen Gentry, a partner with the healthcare group at law firm Quarles and Brady LLP in Indianapolis.

The fragmented nature of Medicaid is a major part of the challenge. Although some states that run their own exchanges, such as Kentucky and California, have managed Medicaid/exchange integration well, other states and the federal exchange have had difficulty with this aspect of enrollment. 

“Kentucky was successful in part because they put everything under one roof so it was all coordinated from the beginning,” says Bill Melville, a market analyst for Decision Resources Group. “Other states have not done as well. For example, Nevada is shutting down its exchange for a year and using [the federal exchange] to gain time to fix its problems, including no-wrong-door issues.”

The swinging door

The difficulty facing the federal exchange and the no-wrong-door feature is not surprising, considering that the federal exchange has to interface with the Medicaid systems of all 36 states using the federal exchange. The fact that some states use multiple systems to manage their Medicaid programs makes the problem even more complex. 

“You may have social services involved or the office of mental health,” says Linda Tiano, a member of law firm Epstein Becker & Green P.C. “You can even have multiple touch points within the state itself, and all of those systems have to talk to the federal exchange and then the federal exchange has to talk to the Centers for Medicare and Medicaid Services [CMS] and the IRS.”

Adding another wrinkle to the situation is the need for a so-called “swinging door” to help Medicaid recipients move back and forth between Medicaid and commercial plans as their income and Medicaid eligibility status change. The smoothness of that swinging door is particularly important for health plans. 

The situation can also hinder any plans for expanding product offerings to capture these members by offering both Medicaid managed care products and qualified health plans so that people can easily move from one product to another. 

“Health plans don’t care if a member is in a qualified plan or a Medicaid product. They want to capture those members for both sides,” says Becky Ditmer, a principal with Ernst & Young. “They want to treat members holistically and they very much want to approach this membership from a continuity standpoint.” 

That means managing member care as they move between Medicaid and commercial plans throughout the year. 

“There is some anxiety among plans about what to expect from that swinging door between Medicaid and the exchange,” says Ditmer. “What level of turnover can plans expect and how do they manage that appropriately?”

In addition to the administrative costs associated with higher-than-expected turnover and other administrative issues, “it could limit plans’ ability to innovate around customer service to build customer engagement and loyalty,” she says.

“If plans have to spend more on administration to keep the product up and running without getting any actual momentum, it just becomes more expensive waiting for these issues to be addressed,” says Tiano.

The data challenge

Despite the myriad issues the exchanges have faced regarding  Medicaid enrollment, most expect the no-wrong-door features of the exchanges to be functioning better for the 2015 enrollment period. 

“There [have been] some positive steps in the right direction and next year will be much better,” says Gendry.

She says work is being done at the state level that will make these interfaces much smoother beyond 2015. For example, Indiana plans to replace its Medicaid system, which is one of the oldest in the country, over the next few years. Meanwhile, other states continue to upgrade their Medicaid systems to facilitate integration with the federal exchange. 

“It will be better this year, but [improvements] will still vary from state to state,” says Melville. “Problems are not necessarily going to go away.” 

The expectation is to experience fewer issues this time around as plans and the exchanges  beef up call center staffing to address enrollees’ problems, he adds.

A key issue for the next open enrollment period will be renewals and the quality of data in these systems from the first enrollment period. For example, the information applicants entered into the federal exchange is not always the same information that states require for Medicaid applications.

Data quality could be a  challenge when plans look at the administrative costs of qualified plans and Medicaid plans on the exchanges. 

“If health plans have to clean up data, they could be spending a lot more money on administration than they anticipated to serve that book of business,” says Ditmer. 

She expects plans to find numerous redundancies in that data that they will have to address. 

A recent report from the U.S. Department of Health and Human Services bears this out. The report found that the federal marketplace was unable to resolve 2.6 million out of 2.9 million inconsistencies because the CMS eligibility system was not fully operational.

In addition, four state exchanges admitted that they were unable to resolve these inconsistencies, which occur when the data provided by applicants does not match records from other federal agencies like the IRS and the Social Security Administration.

“Data looks like the next big mountain that has to be climbed,” says Ditmer. 

Unless it can be synthesized, cleaned up and reconciled to ensure a clean and stable set of data, health plans could find it difficult to handle automatic renewals. 

Looking ahead, Tiano expects to see the exchanges invest in expanding the no wrong door feature to make it easier for special populations to use the system, including populations that need long-term support services and individuals who are dually eligible for Medicare and Medicaid. 

Joanne Sammer is a freelance writer based in Kansas City.