The ACA and Legal Practices (#8) / New contract in process for Healthcare.gov

July 25, 2014

health-care-lawThis is installment #8 in a series of blog postings on the Affordable Care Act (ACA) and legal practices.

The federal Health Benefit Exchange (HealthCare.gov) continues to be a work in progress.

Where initially envisioned as a facility with a “hard start” planned for October 1, 2013, a phased operation has actually resulted.

For the most recent phase in implementation, a new contractor is now being sought.

As attorneys recognize this phased approach that has come to dominate all aspects of the ACA, they can better provide guidelines to clients regarding their individual and organizational efforts.

There have been four distinct steps in implementation of the federal Exchange. Contractor #1 was supposed to have the Exchange up and running on time to achieve scheduled implementation of the ACA. However, the startup didn’t work.

The next step was the “Expert Team” brought in to fix the Exchange, which was able to put enough fixes in place to get through the Year 1 enrollment period.

Then came Contractor #2, to keep the site up and running for a year, after the Expert Team had to go home.

Now, the Department of Health and Human Services (HHS) has published notice of a new search for a Contractor to provide longer-term operations. The new Contractor is being sought through solicitation #141542FFM for the Federally Facilitated Marketplace, available through the Federal Business Opportunities (FBO) web page www.fbo.gov, with a scheduled response date of August 18, 2014.

The federal Exchange is still far from complete or error-free—there are ongoing concerns over data swaps with the Internal Revenue Service (IRS) and with insurance companies. There is also concern that a large public response at the beginning of Year 2 enrollment (to start November 15, 2014) might cause performance to degrade substantially.

Other issues facing the Exchange are:

Coordinating with new employer requirements scheduled to take effect in 2015;

Potential churn in insurance policies as companies try to improve their offerings; and

Struggles to link to the expanded Medicaid program (in several versions, in some states).

It is likely that a planned and orderly phased-in approach for the Exchanges over several years would have been a preferable approach. Possible reasons for the push to start up all-at-once might be that (1) the ACA designers were not aware of potential problems with the implementation of large computer systems; (2) an assumption was made that statutory directions would “have to” produce the desired outcomes; (3) little consideration was given to organizational reactions; and (4) political concerns “were high”over the introduction of any further delays.

It can be expensive and disruptive for clients to attempt to “gear up” for scheduled requirements that are later postponed. It may be helpful for attorneys to trace out likely alternative delays that may result during program implementation, and help clients develop plans that are sufficiently flexible to minimize expense and stress.

More information about the Health Care Exchanges and the ACA may be found in recent books on the ACA and on the health care system, other postings to this blog, and on the ACA Blog, also written by the author of this series.