State Health Insurance Exchanges Choke On Health ITState Health Insurance Exchanges Choke On Health IT

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State health insurance exchanges (HIX) face technological barriers that could prevent many of them from launching in January 2014--on top of the political and legal challenges they face, says a new article in Politico.

The major IT-related problems that Politico cites include:

--The HIX systems must be able to "talk" to many other information systems, including those of the federal government, state Medicaid systems, and private health plans. But the most of the requisite interfaces among these systems have yet to be built.

--The U.S. government has not yet built a data "hub" that will allow HIX systems to access tax information and other data that will determine whether individuals are eligible for insurance subsidies.

--State Medicaid systems are in various stages of modernization. That's a problem not only because of the Medicaid expansion mandated by the federal healthcare reform law, but also because Medicaid systems must use federal income tax data for eligibility verification. In addition, the HIX and Medicaid systems must be able to communicate with each other for eligibility determinations.

[ Some healthcare organizations are choosing to build their own HIEs. Read more at Grow Your Own Health Information Exchange. ]

So far, while 33 states and the District of Columbia have received more than $1 billion in federal grants to establish insurance exchanges, only 15 have actually started work on them. One consultant told Politico that only seven states had contracted with outside firms to develop and build the exchanges. Not surprisingly, only a dozen states are expected to have their exchanges up and running by 2014.

There are a number of reasons for this sorry state of affairs, including political resistance to the healthcare reform law and concern about the possibility of an adverse Supreme Court decision on the constitutionality of the statute. In addition, a KPMG survey of state officials found that a third of them regarded cost as the biggest obstacle to building insurance exchanges.

The history of the Massachusetts' Commonwealth Health Insurance Connector Authority, popularly known as the Health Connector, shows that technology is not an insurmountable barrier to HIX. According to a 2010 report from CSC, which helped the state build the Health Connector website, it took only five months to design and build the exchange, which has operated successfully since 2007.

A more recent CSC report, however, describes the simultaneous assembly of 50 state insurance exchanges as a quantum leap above the complexity of building the Massachusetts Health Connector. Noting that the Affordable Care Act gives the state exchanges the role of gateway to health coverage for anyone not covered by a large company, the report says, "The practical task to create this functionality is enormous and the complexity and effort probably can't be overestimated."

Paula Gallo, a coauthor of the latter paper and a principal in CSC's healthcare group, told information Healthcare that "the technical challenges can be overcome," but states need to collaborate with each other and with health plans to make it work. "If you're all trying to get to the same place," Gallo said, "why not collaborate and leverage the knowledge on both the payer and state sides and come up with something that makes sense and adopt it?"

The federal government has encouraged such an approach, trying to get groups of states to work together on insurance exchanges. Several New England states are collaborating, for example, under the leadership of Massachusetts. But other states have withdrawn from these federally sponsored compacts.

Gallo also pointed out that because so many states are using outmoded legacy systems that can't easily be connected with each other, the insurance exchanges should utilize an enterprise service bus that can integrate these applications within a service-oriented architecture.

Finally, she said, many states are looking at doing custom development of eligibility and enrollment applications. But that approach can take a long time and can be very expensive. If states want to meet the 2014 deadline, she said, they should consider buying commercial software designed for these purposes. "There are already products on the market that have been supporting these business functions for a long time," she noted, "and they do it quite well."

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