Colorado’s exchange progressing, but IT problems loom

By Katie Kerwin McCrimmon

Colorado has made substantial progress in implementing a health insurance exchange, but significant work remains in part because of Colorados flawed computer systems, a new reportfrom the Urban Institute has found.

The biggest challenge for Colorado may be that the state is starting with a flawed foundation, a legacy computer system CBMS (Colorado Benefits Management System) that is inflexible and difficult to modify, the report states.

Researchers from the Urban Institute are conducting a comprehensive monitoring and tracking project to assess implementation of the Affordable Care Act throughout the U.S. The Robert Wood Johnson Foundation is funding the project, which started in 2011 and will last for several years.

The U.S. Supreme Court heard arguments on the legality of the Affordable Care Act in March and could strike down all or parts of the law by the end of June.

Leaders in Colorado have said that regardless of the Supreme Court ruling, Colorado will move forward with its health insurance exchange, which is designed to create an online market where consumers can shop for health insurance options.

Along with Colorado, researchers from the Urban Institute are evaluating health reform efforts in Alabama, Maryland, Michigan, Minnesota, New Mexico, New York, Oregon, Rhode Island and Virginia.

The researchers found that Colorado had a head start on the nation because of the 2006 Blue Ribbon Commission, also known as the 208 Commission. Members of the bipartisan commission endorsed a slate of reforms, many of which later became components of the Affordable Care Act, and created a blueprint for reform in Colorado.

Colorado was the first state where a divided legislature voted to create a health insurance exchange. Leaders in many other states have refused to move forward on implementation of the Affordable Care Act until the Supreme Court rules.

The Urban Institute researchers found that it was key for state leaders to adopt a Colorado-specific version of health reform. Backers did extensive work to win endorsements from business leaders and survey the uninsured about their needs. Researchers noted that the contentious battle over health reform in Washington, along with emerging Tea Party influence on Colorado politics significantly eroded the cooperative, bipartisan spirit that had animated the Blue Ribbon Commission.

Even so, strong relationships among policymakers allowed Colorado to move forward. Yet, the study authors noted that the exchange legislation primarily addressed structure and governance issues rather than establishing exactly how the exchange will operate. The researchers commended the exchange staff and board chair, Gretchen Hammer, who is also executive director of the Colorado Coalition for the Medically Underserved.

Work groups have been investigating options for future design and decision-making.

Despite this progress, many difficult and technical decisions remain on exchange operations, enrollment methods, plan participation, risk adjustment and reinsurance, and subsidy determination and management, the report authors found.

They also noted that meddling from a legislative review committee could inject politics into ongoing decision-making.

The biggest concern, however, remains with the troubled IT system.

CBMS has been the target of consumer lawsuits and a thorny problem for multiple governors and their IT chiefs. Lawmakers will get an update this month on attempts to improve the system.

Researchers also underscored challenges with Medicaid because determining eligibility for programs that provide health care to the poor along with multiple other human services programs is the responsibility of counties in Colorado. Many have unique processes and may be resistant to the changes required for successful IT implementation. Responsibility for IT problems is divided among multiple state agencies, including health exchange leaders, Medicaid managers and the relatively new Office of Information Technology.

Thus far, it is not clear that these offices can work in complete harmony. Still the state has made rapid progress over the past several months, and expects to award vendor contracts for exchange IT development and upgrades to CBMSby mid-2012, the study authors found.