On Jay Gonzalez’s first Connector Board meeting as Secretary of Administration & Finance and the chair of the Connector Board, there was plenty to discuss. Materials from the meeting are posted here.
The meeting discussed the plans for next year’s Commonwealth Care program, and examined the small business Commonwealth Choice program. Read on for our detailed report.
Executive Director’s Report
Jon Kingsdale started the meeting with commendation for Massachusetts-based health plans. The National Committee for Quality Assurance (NCQA) recently named three of the five Massachusetts MassHealth/Commonwealth Care plans in the top 4 out of 200 national Medicaid plans (BMC HealthNet, Fallon, Neighborhood Health Plan, ranked second, third and fourth nationally). Four of the six CommChoice plans also ranked in the top 10 nationwide (Harvard Pilgrim, Tufts, Fallon and Health New England were ranked number 1, 3, 7 and 8).
Kingsdale also updated the board on the CommCare Bridge program run by CeltiCare Health Plan, available to special status legal immigrants who lost Commonwealth Care coverage on September 1st. Thus far, 21,465 individuals have been enrolled. CeltiCare has reported over 10,000 customer service calls, and boasts that they have short wait times; they have also done outreach calls to 10,000 Boston-area enrollees and 3,000 enrollees in the northern and southern parts of the state. According to Kingsdale, CeltiCare has approved 5 out-of-network kidney transplants and 1 bone marrow transplant. CeltiCare plans to waive co-pays for insulin and some other drugs that don’t have generic equivalents. They have contracted with 39 community health centers and 20 hospitals. Kingsdale stated that the plan “is going better than expected so far.”
CommCare FY11 MCO Contract Procurement
Patrick Holland, the Connector’s CFO, gave the board an overview of what to expect for in the Commonwealth Care Fiscal Year 2011 procurement process. In order to prepare for procurement, Connector staff are analyzing the impact of discontinuing auto-assignment and eliminating special status legal immigrants from the program. Holland plans to present data on the impact of these two programmatic changes on the claims cost, capitation rate, and risk pool at the December board meeting. In January and February, Connector staff plan to determine the procurement strategy based on program data and updated budget and revenue information with the goal of finalizing the procurement strategy by March.
Dolores Mitchell commented that it would be helpful to get the message out to providers that “we don’t have much money to spend.” Holland responded that they are trying to mitigate increases, but will be big challenge. Terry Dougherty pointed out the importance of comparing what the cost per member was before the program changes and after in order to determine the best strategy moving forward. Celia Wcislo also commented that the board needs to understand what the change in cost is for the program in relation to the Connector’s budget constraints, but not lump the two together. Jon Gruber asked Holland to remind the board of what the process of increasing co-pays was last time around (in 2007), and what the impact of raising co-pays was on the MCOs. Kingsdale answered that the health plans did OK when copays were raised. Nancy Turnbull requested expanding the range of information sought, so the board can examine the quality and access data as well as financial data to see what value the plans are delivering in terms of care management. Kingsdale responded that an audit was done of MCOs’ care management initiatives and will share this at the December board meeting.
Vote on CommCare Eligibility Regulation Change
Jamie Katz presented the comments the Connector received (read the ACT!! comments and the Health Law Advocates comments) in response to the changing the Commonwealth Care eligibility regulations to comply with the statute eliminating special status legal immigrants from Commonwealth Care. After reviewing testimony from the ACT!! Coalition and Health Law Advocates, Connector staff recommend the regulation change be accepted as is. The Board voted to accept the regulations. Celia Wcislo voted yes since she recognizes the regulatory change was need to keep in line with the statutory change, but expressed that she is opposed to the change: “No one should be singled out like this to lose coverage.” We agree.
Contributory Plan Update
CommChoice Director of Product Development Cheryl Ierna gave an update on the contributory plan (CP), a program in the pilot stages. CP offers a choice of private health plans for small employers to offer their employees. The Contributory Plan includes 20 brokers who can sell CP products to employers they currently do business with. Employers choose a plan within a tier (Gold, Silver, Bronze) and employees can choose the employer’s plan or an alternative plan as long as it is within the tier chosen by the employer. From February-September 2009, the Contributory Plan pilot enrolled 42 employers and 145 subscribers, with an average group size of 3.5. An advisory committee comprised of health plan representatives, an actuary, and Connector representatives was formed to make suggestions for the program.
According to Ierna, larger groups tended to choose Silver plans and smaller groups chose Bronze plans; only 1 employer chose a Gold plan. Excluding groups of 1, 35% of subscribers (employees) chose an alternative plan from the one their employer chose, so the majority stuck with their employer’s choice. Nancy Turnbull also asked Ierna and her staff to see if there are any gender difference in who chose to stay with their employer’s choice. Jon Gruber asked Ierna to break down the data to see the effect of employer contributions on choosing to stay with benchmark plan or changing.
The Contributory Plan is also different from the regular market because it uses list billing as opposed to composite billing, and is not allowed to re-rate. In the standard market, brokers offer the employer a composite (average) rate for individuals and families. After all the employees who opt to take the plan are enrolled, the insurer can then analyze what the group looks like (age of members, number of members, etc.) and charge a new rate. The Contributory Plan, on the other hand, provides the actual premium cost for an individual and family plan, and cannot change this cost after enrollment. CommChoice staff found that health plans only took in slightly less in premium rates with list billing as opposed to re-rating. Celia Wcislo was concerned that list billing may be confusing for employers.
Dolores Mitchell asked Ierna what the incentives for brokers to sell through the Contributory Plan are. Ierna responded that the CP offers the broker something different to offer their employer clients; many brokers have used this as a marketing tool. Some disincentives, however, are that brokers get compensated less; they receive 2.4% of premiums from the Connector as opposed to 4% on the outside market; this has been a barrier to sales. Kingsdale also noted that the restriction that brokers can only sell CP plans to employers they already sell to is also a barrier. Ian Duncan asked what the point of paying brokers less is; Ierna responded that it’s all the money the Connector had left.
Nancy Turnbull asked why an employer of 1 would participate in the Contributory Plan. Kingsdale stated that while the Connector look at this program as providing choices, the employer sees it as health insurance. A self-employed person may want to have choices available for additional employees when their company grows. Ierna added that some people bought through the Contributory Plan because they liked the online experience.
Turnbull inquired whether most employers buying CP had offered insurance before, and if they had whether switching to CP was upgrading or downgrading. Ierna answered that most had already offered insurance, and the CP plans were mostly at the same level. She commented that many employers are paternalistic, and don’t want to raise costs for employees; small employers are actually more likely to contribute 100%; 50% of employers contributed 50-80%.
Ierna presented next steps in program development and improvement for the Contributory Plan, including removing some barriers that affect program growth. Wcislo asked why the program is moving so slowly. Mitchell seconded that question and asked why the Connector continues the program at such low numbers. Kingsdale notes that they are working to grow the program by addressing issues such as broker distribution, pricing, website functionality, and out of state coverage. Wcislo recommended that staff look at what CP is costing now and what it will cost with the improvements. She also recommended that the staff keep in mind how the CP will line up with national reform.
Administration and Finance Sub-Committee Report
Rick Lord, who participates in the Administration and Finance sub-committee of the Connector Board along with Celia Wcislo and ANF Secretary Jay Gonzalez, reported that the Connector received an unqualified audit, meaning all their finances in order. He highlighted the fact that the Connector transferred $5 million to the Commonwealth Care Trust Fund in FY09. Lord also presented a report which examined executive compensation at the Connector. Mitchell suggested they look at how the Connector’s compensation compares with compensation of executives at other state agencies and quasi-public agencies.