California: Marketplace Proposes to Exclude Poor Performing Hospitals

Covered California, the State-based Marketplace, has proposed excluding hospitals from its qualified health plan (QHP) issuers' networks if an issuer identifies it as performing poorly or having excessively high costs. The first-of-its-kind proposal is intended to improve cost-effectiveness and the quality of care provided in the State's hospitals. Issuers would begin identifying "outliers" in 2018 and the State would begin cutting those hospitals from networks by 2019. The Covered California board will vote on the proposal next month.

Kentucky: CMS Targets June for Decision on Transition to HealthCare.gov

CMS has notified Kentucky that it will decide by June 1 whether the State will be allowed to use HealthCare.gov for 2017 Marketplace enrollment. As captured by Rachana Pradhan of POLITICO Pro, until CMS makes a final decision, Kentucky must prepare to implement a contingency plan to assure residents can enroll in coverage without disruption when open enrollment begins on November 1. CMS's announcement is in response to Governor Matt Bevin's (R) plans to dismantle kynect, Kentucky's State-based Marketplace, and transition to HealthCare.gov by the end of the year.

Minnesota: House Bill Would Allow BHP as Option on State-Based Marketplace

Legislators in the House have introduced a bill to allow MinnesotaCare, the State-run basic health program for low-income individuals, to be sold on MNSure, the State-based Marketplace, as a "public option" for those with incomes above 200% of FPL (the program's current income limits). Enrollees with incomes up to 400% of FPL would be eligible to receive tax credits towards plan costs. Under the proposal, the State would calculate statewide premiums, which the bill's authors hope would provide more affordable pricing and benefits, particularly in rural areas. The authors also note that adding a State-run plan to MNSure could encourage private insurers to improve benefit packages or lower premiums.If the bill passes, the State Department of Human Services would be required to request a Section 1332 State Innovation Waiver from the federal government for authority to implement the proposal.

GAO Finds Security Vulnerabilities on HealthCare.gov

The Government Accountability Office (GAO) reviewed security issues related to the HealthCare.gov data services hub and CMS oversight of State-based Marketplaces (SBMs) and found that there were 316 security related incidents between October 2013 and March 2015, though no systems or sensitive data, including personally identifiable information, were compromised. GAO also found "weaknesses in technical control" of the data services hub including insufficiently restricted administrator privileges, inconsistent application of security patches, and insecure configuration of an administrative network. In its review of SBMs, GAO found "significant weaknesses" in the controls of the three SBMs selected for review, including insufficient firewalls and encryption. GAO recommended that CMS define procedures for overseeing the security of SBMs and require continuous monitoring of SBMs' security controls. HHS concurred with the recommendations.

CMS Delays Online Marketplace Eligibility Appeals for an Additional Year

Marketplaces will be allowed to continue processing eligibility appeals using a paper-based process through December 31, 2016, according to guidance released by CMS. The year-long extension, the third CMS has provided since the August 2013 final rule, offers Marketplaces additional time to become fully compliant with regulations for internet-based appeal requests while maintaining appellants' due process rights through the paper-based process. State Medicaid and CHIP agencies will not be required to electronically transfer records and HealthCare.gov will also continue to utilize the paper-based eligibility appeals process through the end of the year. The guidance applies to individual market eligibility appeals, employer appeals, and SHOP employer and employee appeals.