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MA Connector: CommCare (Subsidized Market) Competitive Bidding Process (FY12). Sets a range for rates that are actuarially justified; within that range, sets a rate ceiling. Insurers must bid below the ceiling. Incentives for low bids: some members are assigned to the lowest bidder.
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MA Connector: CommCare (Subsidized Market)Competitive Bidding Process (FY12) • Sets a range for rates that are actuarially justified; within that range, sets a rate ceiling. Insurers must bid below the ceiling. • Incentives for low bids: some members are assigned to the lowest bidder. • For example, members who do not select a plan have been auto-assigned to the lowest-cost plan. • These incentives may increase insurers’ motivation and leverage to negotiate lower provider rates. • Payment reform: insurers required to work with the Connector on initiatives, including participation in pilot projects.
MA Connector: CommCare (Subsidized Market)Results of Procurement Process • Since program inception, premiums have increased less than 5% a year – compared to 8-10% in the commercial market. • For FY12, most insurers bid flat or lower rates compared to FY11. • Recruited a new, out-of-state plan (CeltiCare) – the first entrant in two decades. • CeltiCare is lower cost, which increased competition and drove lower bids from other plans. • Has never turned away an insurer. • Offers all of the large and mid-sized HMOs in the state.
MA Connector: CommChoice(Unsubsidized Market) • Does not negotiate on price. • Awards “Seal of Approval” to plans that offer good quality and value. • Issues letters to participating insurers with proposed amendments to contracts. • Results: all insurers receive 4 stars or an “Excellent” rating from NCQA. • Helped a Medicaid managed care organization obtain a commercial license so that it could participate.
Utah Health Exchange • Acts only as a market organizer; open to any willing insurer that meets minimal requirements. • Does not negotiate on price, set minimum quality standards, or limit plan offerings. • In 2010, consumers had a choice of 146 plans.
Federal Employees Health Benefits Program (FEHBP) • Office of Personnel Management issues an annual “call letter” to begin negotiations. • Advises plans on policy initiatives. • Asks plans to submit benefit and rate proposals. • OPM reviews premiums based on costs, past experience, utilization, and inflation. • Results: historically, the program has held premium increases below industry averages.
Federal Employees Health Benefits Program2011 Call Letter Policy Initiatives • “We encourage you to submit proposals to implement pilot programs directed at managing patient care such as integrated healthcare systems.” • “We expect you to offer programs that promote health and wellness…This includes incentives for enrollees who complete a health risk assessment, are compliant with disease management programs, or who participate in wellness activities or treatment plans aimed at managing and improving health status.” • “We expect you to provide us with specific proposals to reduce the incidence of both adult and childhood obesity.” • “We expect you to submit proposals to increase and strengthen programs that will demonstrate improved health outcomes, patient safety, and prevent hospital readmissions.”
California Public Employees’ Retirement System (CalPERS) • Very large employer that incorporates plan performance into contracts with plans. • Actively encourages plans to implement delivery system and care management reforms. • Partnered with one of its plans to pilot an Accountable Care Organization. Results: • Estimated $15.5 million in health care savings. • Reductions in hospital readmissions and the length of hospital stays.
