Implementing the Affordable Care Act: state action on quality improvement in state-based marketplaces.

Under the Affordable Care Act, the health insurance marketplaces can encourage improvements in health care quality by: allowing consumers to compare plans based on quality and value, setting common quality improvement requirements for qualified health plans, and collecting quality and cost data to inform improvements. This issue brief reviews actions taken by state-based marketplaces to improve health care quality in three areas: 1) using selective contracting to drive quality and delivery system reforms; 2) informing consumers about plan quality; and 3) collecting data to inform quality improvement. Thirteen state-based marketplaces took action to promote quality improvement and delivery system reforms through their marketplaces in 2014. Although technical and operational challenges remain, marketplaces have the potential to drive systemwide changes in health care delivery. OVERVIEW Health care quality in the United States is widely recognized to be highly variable, with many Americans not receiving needed care and others receiving uncoordinated, unnecessary, or even harmful services.1 While public and private health care purchasers have taken promising steps to achieve the three-part aim of improved health, better quality, and lower health care costs, their success to date has been inconsistent.2 The new health insurance marketplaces created by the Affordable Care Act have the potential to improve the quality and cost-effectiveness of health care in the individual and small-group markets by establishing a common set of quality improvement requirements for participating insurers and creating a competitive shopping experience in which consumers can more easily compare plans on quality and value.3 The Affordable Care Act includes a number of standards intended to encourage private health insurers to improve quality of care and develop innovative delivery system reforms (Exhibit 1).4 These include requirements JULY 2014 2 The Commonwealth Fund that insurers selling plans in the marketplaces be accredited, report on quality and performance metrics, and implement quality improvement strategies.5 However, there are challenges to implementing these and other quality requirements: difficulty comparing pre-marketplace health plans with marketplace plans because of potentially different provider networks, benefit structures, and patient populations; the emergence of new commercial insurers for which no quality data exist; the lag time involved in quality data reporting; and the need for adequate enrollment in marketplace plans to ensure the statistical validity of quality measurement and reporting.6 The U.S. Department of Health and Human Services is phasing in the quality requirements, but states may implement them earlier or tailor them to achieve state-specific goals.7 Exhibit 1. Affordable Care Act Quality Requirements for Qualified Health Plans Requirement Description Effective Date Accreditation • Marketplace insurers must be accredited on the basis of local performance of their qualified health plans (QHPs) in categories including clinical quality measures (as measured by HEDIS) and patient experience ratings (as measured by CAHPS). Fully accredited by fourth year of certification as a qualified health plan Quality improvement strategy • Qualified health plans must implement a quality improvement strategy to prevent hospital readmissions, improve health outcomes, reduce health disparities, and achieve other quality improvement goals. 2013 for the 2014 plan year Quality reporting • Qualified health plans must report to the marketplace, enrollees, and prospective enrollees on health plan performance quality measures. • All nongrandfathered plans inside and outside the marketplace must submit an annual report to HHS and to enrollees regarding whether benefits under the coverage or plan satisfy quality elements similar to those in the quality improvement strategy. 2016 for the 2017 plan year Quality rating system • Secretary of HHS must develop a rating system and enrollee satisfaction survey system for qualified health plans. • Marketplace websites must display federally developed quality ratings and enrollee satisfaction information to consumers. • State marketplaces may display their own quality rating systems prior to 2016; beginning in 2016, they may display a state-specific quality rating system in addition to the required uniform federal quality rating system. 2016 for the 2017 plan year Additional quality requirements • Medical loss ratio: health insurers must spend at least 80 percent to 85 percent of revenue on health care and quality improvement. • Patient safety: qualified health plans must comply with patient safety regulations. 2012 (medical loss ratio) 2015 (patient safety) a Healthcare Effectiveness Data and Information Set (HEDIS) is a registered trademark of the National Committee for Quality Assurance (NCQA) and is included in NCQA accreditation. HEDIS shows how often health insurance plans provide scientifically recommended tests and treatments for more than 70 aspects of health. Consumer Assessment of Healthcare Providers and Systems (CAHPS) is a registered trademark of the Agency for Healthcare Research and Quality and is included in NCQA and URAC (formerly known as the Utilization Review Accreditation Commission) accreditation. CAHPS surveys patients’ own experiences of care, including timely access to care and overall views of health plans and doctors. b Nongrandfathered plans are health plans created after March 23, 2010, or those that were in existence on or before March 23, 2010 but did not meet regulatory criteria for remaining grandfathered. c Under the Affordable Care Act, health plans in the individual and small-group markets must spend at least 80 percent of revenues on health care and quality improvement; for large-group plans, the minimum medical loss ratio is 85 percent. d Beginning in 2015, QHPs may only contract with hospitals with greater than 50 beds if they use a patient safety evaluation system and health care providers that implement quality improvement mechanisms. Source: Authors’ analysis. State Action on Quality Improvement in State-Based Marketplaces 3 This brief reviews action taken by state-based marketplaces to implement the law’s quality requirements, as well as other efforts to improve health care quality. It focuses on three areas: 1) selectively contracting only with insurers that advance marketplace goals by implementing quality and delivery system reforms; 2) informing consumers about health plan quality; and 3) collecting data to inform quality improvement. Thirteen state-based marketplaces took one or more of these steps in 2014. Some states with federally facilitated marketplaces also may be pursuing similar strategies, but this is outside the scope of this brief.8 States are in different stages of progress. Some are opting for a more proactive approach, while others are deferring quality improvement efforts to focus on immediate operational issues, avoid requirements that might deter insurers from participating, or await further federal guidance. Efforts to drive quality improvement and broader payment and delivery system reforms through the marketplaces are still in their infancy and can be expected to evolve significantly in the future.9