Affordable Care Act and the New Reform Conversation

Don your helmets and fasten your seat belts because the ACA (Affordable Care Act) is roaring ahead. Between the ACA and calls for greater accountability and transparency in the delivery system, what looms on the horizon is nothing like business as usual.

The ACA called for the creation of Health Insurance Exchanges at the state level. This article first examines the implications of some of the key provisions of those exchanges and looks at the Health Benefit Exchange (HBE) here in Washington State.  It also outlines some of the future work of the Bree Collaborative and its evidence-based approach to clinical procedures as advocated in the ACA.

Some ACA provisions have already kicked in.  One of the most important is the creation of Health Insurance Exchanges that will become the new health insurance marketplace for individuals, small employers and Medicaid enrollees.  Open enrollment for these new exchanges is targeted for October 1, 2013 for coverage  effective on January 1, 2014.

Health Insurance Exchange in Washington State

Health Insurance Exchanges are designed to provide ‘one stop shopping’ for Medicaid, low income consumers, individual consumers and small employers with up to 50 employees.  Currently, eligibility for these programs is not consolidated—people go to Department of Social and Health Services (DSHS) to apply for Medicaid, to the Health Care Authority (HCA) to apply for the Basic Health Plan and to the private insurance marketplace if they seek individual or small group insurance policies, often using insurance brokers to help them determine their choices.

The new Exchange will merge those application options. Consumer will go to the Exchange, indicate their income, family size, etc., and the Exchange will highlight the benefit plans, costs and options the consumer would be eligible for, e.g., Medicaid,  tax credits for private insurance and so forth.  With this information, the consumer can choose the plan(s) they want.

 Status of Washington State Exchange

Washington State actively embraced the Exchange and was one of the earliest states to have passed enabling legislation for the Exchange. Washington was also one of the first states to receive a $127.8 million level two implementation grant. It is also one of six states (Connecticut, Colorado, Massachusetts, Maryland, Oregon and Washington) to receive approval by HHS this week of its Exchange “blueprint.”

Washington’s Health Benefit Exchange (HBE) is an independent state agency operating under the Governor’s office.  The Executive Director is Richard Onizuka, former policy director for the Health Care Authority.  An 11 member Board of Directors provides policy leadership and guidance to the HBE. The Board is chaired by Margaret Stanley, former Secretary of Health with Governor Booth Gardner.  Seven committees are currently working on implementation details and policies.  Open enrollment is scheduled to start October 1, 2013.   See

The level two implementation grant also requires the HBE to demonstrate to CMS (Center for Medicare and Medicaid Services)  and the state legislature how the HBE will be financially sustainable after 2014 when the grant ends.

In addition to the $128 million implementation grant already received, Washington also applied for a $34 million CMS Innovation grant. CMS will award five states up to $60 million in Innovation Grants.  Another 25 states will be able to receive Innovation grants of up to $3 million.  If a state applies for one of the five large grants but does not receive the award, the state is automatically eligible for consideration for the smaller $3 million grant.

The Washington State grant targets reductions in variations in care for obstetric services and chronic care using much of the work of the Bree Collaborative and the Foundation for Health Care Quality. and

Challenges Facing Exchange Implementation

Putting all these elements together is no small task.  First, developing the information technology infrastructure for open enrollment alone is a daunting task.  Information systems need to be integrated and developed so the Exchange can be a system integrator that can quickly assess a consumer’s eligibility for the various coverage options. Specifically, it needs to interface with both the public programs at DSHS, Basic Health Plan as well as with the Insurance Commissioner’s Office for private insurance policies. These programs will be collaborative rather than combined. A separate SHOP Exchange just for small businesses will also be part of the Exchange.  All this must be ready by October 1, 2013.

The Exchanges are also required to define ‘essential benefits’ that must be included in all plans. HHS has now defined the 10 essential benefit elements that must be included in any benefit package,  but the states have flexibility of refining those benefits to more closely match the standards in each of the states.   The Washington Insurance Commissioner’s Office (OIC)  must submit a list of essential benefits as well as a list of state mandated benefits that would require state appropriation to the state legislature and HHS.

The truly interesting provision is that the HBE must submit to both the state legislature and HHS how it will be sustainable after its last round of grant funding ends in 2014.

Quality and sustainability are major challenges. The ACA legislation not only focused on expanding health insurance coverage, it also stipulated that the health care system had to improve both affordability and quality. Significant consensus exists that health care costs cannot be sustainable without necessary improvements in the delivery system.

Consequently, the health care reform conversation is rapidly becoming one of reducing variations in care to improve quality and value.  Employers and the State (as an employer) want to assure money going into the system is spent wisely and they are becoming more active in assessing that this happens. Boeing, for example, is now offering its non-union employees the option of being flown to Cardiac Centers of Excellence out of state when they need cardiac surgery.  Boeing believes it is more cost effective with demonstrated quality outcomes to cover travel costs of the patient and a companion to and from a Cardiac Center of Excellence out of state than to have those services provided here in Seattle with less consistent quality outcomes.

Purchasers want to know they are getting value for their health care dollar—which raises questions about patient care decisions.  Discussions now increasingly revolve around  ‘value’ with value being defined as both cost and quality.  The Bree Collaborative is emblematic of this new discussion.  On October 1, the Collaborative members unanimously voted to support that every spinal procedure in the state be reported in clinical detail just as they now report other surgical data to SCOAP (Surgical Care and Outcomes Assessment Program) within the Foundation for Health Care Quality (FHCQ)   It also unanimously agreed that all findings be made public, be transparent and be reported by doctor and by medical group. The data will also be hospital specific.

The Bree Collaborative and the Foundation for Health Care Quality

The Bree Collaborative is an outgrowth of an earlier public/private partnership AIM (Advanced Imaging Management) Project to study and make recommendations about the use/overuse of advanced imaging—CT, MRIs, among others—using an evidence-based medicine approach.  AIM submitted its final report in February 2011.

The Bree Collaborative, chaired by Steve Hill, Director, Department of Retirement Systems and President of the Board of Directors for the Puget Sound Health Alliance, is an outgrowth of AIM. The Bree Collaborative was formed by the state legislature with appointees named by the Governor. The Board’s task is to examine two to three clinical areas each year.  The Collaborative chose cardiology, obstetrics, spine care and hospital re-admissions.

The Collaborative’s first report was on obstetric care.  Pregnancy, birth and newborn care represent the most expensive hospital conditions in total billed to both Medicaid and private insurance. Medicaid pays for half of all births in the state.  The variation in deliveries between hospitals is extensive, with nearly 20% of all births being primary C-Section care.  C-Section deliveries increased 73% between 1996 and 2009.

The HBE’s potential $34 million CMS Innovation grant is based on using such clinical guidelines that have emerged from the Bree Collaborative’s and FHCQ’s work in these areas.

Gubernatorial Election and Medicaid Expansion

Governor-elect Inslee has said he fully embraces the Exchange, so we can anticipate that work will continue to proceed quickly as Inslee assumes office.

Medicaid expansion of up to 138% of poverty, however, is not necessarily a done deal.  The 2013 Legislative session will have to examine the proposed expansion.  But, Washington is still in a recession and any talk of expansion will have decided with offsets for other state expenditures.  The one new change in Medicaid coverage that will be effective in 2014, is that low income single men will not be eligible for Medicaid which is not currently the case.

The Fiscal Cliff

The big unknown right now is the fate of Medicare Sequestration. Because Congress did not act on budget issues prior to its September recess, Medicare providers will see $11 billion in reductions unless Congress acts in its lame duck session, as we are seeing played out now in the press.

If we do go off the fiscal cliff and the Sequestration happens, Medicare providers—hospitals and physicians—would see a 2 percent reduction on top of the SGR (Sustainable Growth Rate) 27 percent Medicare cuts already in the works.  The Washington State Medical, Nurses and Hospital Associations have joined together to fight these reductions.  If Congress does not act to rectify this, it is estimated that at least 16,000 jobs will be lost here in Washington State.

 Challenges for 2013

The HBE must develop a sustainability plan for the Exchange after its implementation grant ends in 2014.  Consequently, issues such as essential benefits, provider networks and provider rates will be under review and discussion once more.

Perhaps the biggest change in the environment is the increasing pressure for transparency and accountability. The Bree Collaborative’s unanimous support for transparency in reporting on spine care sets the stage and creates a precedent for other clinical disciplines.

The ACA’s requirements that the HBE demonstrate sustainability after 2014 as well as assure higher quality from the health care system has changed the nature of the health care reform debate from one of structure to one of value. Value being both cost and quality.

Information for this article stems from interviews with Steve Hill; Jonathan Seib, Executive Policy Advisor to Governor Gregoire; and Terry Rogers, MD, CEO,  Foundation for Health Care Quality; and materials from the Health Benefit Exchange and Puget Sound Health Alliance.  Parts of this article appeared in the Nov/Dec. Bulletin of the King County Medical Society.  

Coming Next:  The ACA and Access:  A Discussion with the HBE, Medicaid and low-income providers

Kathleen O’Connor, Publisher and Editor

December 13, 2012



About Kathleen

Kathleen O’Connor: 30+ year health care consumer advocate, non-profit executive and author. For more information about Kathleen, please see "About" on the main content bar above.
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One Response to Affordable Care Act and the New Reform Conversation

  1. Kathy Cullen says:

    Absolutely the best article I’ve read so far on the implications of the ACA on Washington state. Concise, understandable and informative. Keep them coming!

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