May 17, 2016

Mike Adelberg: Covered California Introduces Major Contract Changes

On April 7, Covered California—the largest state-based health insurance exchange in the country—announced changes to its plan contracts designed to improve the quality of care. The contract changes require plans selling policies through the state exchange to meet a number of standards in quality and payment structure, boost primary care, track patient health and educate consumers on treatment options and cost-sharing requirements. These policies push well beyond what the Centers for Medicare and Medicaid Services (CMS) has implemented in the federal exchanges, but aligns with Department of Health and Human Services (DHHS) leadership statements about the public exchanges driving reforms in health care delivery.

"The steps being taken by the California exchange push active purchasing—in which the government uses its market clout to change behavior—to a new level in the commercial market," Mike Adelberg, senior director at FaegreBD Consulting, told Inside CMS. "The California Exchange, because of its size, competitive market, and non-grandfathered risk pool, can take active purchasing steps that might not work in many other places. If you push insurers too hard in some states, given current losses, they'll leave."

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