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Exchange Establishment Grant Applications

Six states applied for the third round of Level One Exchange Establishment Grants by the September 30 deadline. A total of 16 states and the District of Columbia (DC) have already applied for round one and round two funding. Rhode Island is the only state that has submitted an application for Level Two Exchange Establishment Grant funding.

Arizona requested $29.8 million for the development of an information technology (IT) infrastructure that will allow the state to create a website which is fully integrated with the state’s existing Medicaid Web-based eligibility and enrollment system. In addition, Arizona is planning to use the funds to finalize the requirements for certification, recertification, and decertification of health plans. Finally, the grant will enable Arizona to develop and implement a public education and outreach campaign and determine how to structure its Navigator program.

Idaho intends to use the $30.9 million in establishment grant money for the Preliminary Design Initiative. According to the application, during this initiative, the state will:

• Conduct analyses and develop recommendations on the design, development, and implementation of the exchange;
• Conduct 12 stakeholder and work group meetings;
• Define and establish a governance structure by November 2012;
• Implement agreements between the Department of Insurance and the Department of Health and Welfare to meet the  “no wrong door” eligibility requirements;
• Define exchange architecture, including related systems, and procure necessary components to provide a technical demonstration;
• Analyze and compare various financial sustainability models and establish a financial management structure;
• Develop a plan to prevent waste, fraud and abuse of funds used to develop and operate the exchange;
• Monitor legislative and regulatory state activities to ensure compliance with and enforcement of federal insurance market reforms;
• Build on data from current consumer assistance programs and feedback from stakeholder groups, and other states’ individual and small business assistance processes to strengthen qualified health plan accountability and function of exchange and to provide assistance to exchange customers;
• Identify exchange markets, products, programs, and detailed system and operational requirements for implementation; and
• Complete the necessary assessments and develop a more comprehensive detailed gap analysis.

New Mexico’s Office of Health Care Reform (OHCR) also applied for a Level One Exchange Establishment Grant in September. According to the OHCR’s application, New Mexico is requesting $34 million to pursue the following activities:

• Refining the exchange vision and objectives to comply with laws and regulations;
• Amending state law as necessary to comply with federal law;
• Exchange planning, development, implementation, operations, and stakeholder engagement;
• Developing and implementing a multi-year business and operational plan;
• Achieving exchange federal certification by January 2013;
• Submitting a Level Two exchange grant in March, 2012;
• Beginning exchange operations in 2014; and
• Determining funding mechanisms to ensure self-sustainability by 2015.

Tennessee applied for a $1.5 million Level One Establishment grant that would help the state continue planning and researching the core exchange planning areas identified by the U.S. Department of Health and Human Services. Tennessee will use this funding to “procure technical expertise from consulting and information technology firms to develop business requirements for exchange business architecture areas. The funding will also provide continued grant-funded support for 2.5 full-time equivalent staff, plus expenses related to necessary travel and administrative costs.”

Vermont also applied for a Level One grant to pursue the following activities:

• Conduct research on improving, coordinating, and simplifying existing wellness and health promotion  programs;
• Identify topics and procedures for the Joint Advisory Committee meetings and stakeholder meetings;
• Understand ERISA provisions in the context of the exchange;
• Develop job descriptions and management structure of exchange staff;
• Conduct a study on program integration;
• Issue request for proposals (RFPs) for IT projects;
• Implement a sustainability model and  an accounting and financial reporting system;
• Identify and eliminate fraud, waste, and abuse;
• Design risk adjustment and reinsurance programs;
• Use Vermont’s Health Care Ombudsman program to provide assistance to individuals and small businesses;
• Establish a call center and a navigator program;
• Develop business operations and exchange management functions;
• Examine methodologies for implementing all-payer rates within the exchange; and
• Implement a new integrated eligibility system.

Michigan also submitted an application.

In Colorado, a legislative oversight committee blocked an application for Level One funds that would have been used to set up the technology infrastructure needed to operate an online exchange in 2014.¹  However, the chairwoman of the Colorado Health Benefit Exchange board said she was hopeful that the board could apply by the December 31 deadline after providing clarifying information to answer legislators' questions.

On October 11, Rhode Island announced in a press release that the state applied for a $74.5 million Level Two grant to develop, design, and procure technology for its exchange.

¹Sealover, E. (2011, September 28). House GOP move stalls health reform action. The Denver Business Journal. Retrieved on October 24, 2011, from http://www.bizjournals.com/denver/news/2011/09/28/house-gop-move-stalls-health-reform.html?s=print.