Report: V.I. health care information systems can't support Affordable Care Act exchange

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ST. THOMAS ­- According to a report commissioned by the governor's Health Care Reform Implementation Task Force, the territory's health care information systems are inadequate to support the creation of a health insurance exchange that complies with the Affordable Care Act and the only viable option is to use a stateside system that already complies.

A number of features for an exchange required by the health reform legislation passed in 2010 - including a health insurance exchange web site and call center - could not be accommodated using the territory's four health care information systems, according the report.

"The current VI legacy Health Information Systems: VIMS, CARIBS, and Health Pro XL do not support Affordable Care Act Health Insurance Exchange core functions in any significant way," the report prepared by New Wave Telecom & Technologies, Inc. states.

The report is the first of two feasibility studies the governor's task force will use to make its recommendation as to the territory's future health care system.

The task force is considering whether the Virgin Islands should establish its own health insurance exchange, designed to offer affordable rates by pooling subscribers and private carriers, or seek almost $300 million during the next seven years to expand Medicaid coverage.

The options are the result of revisions to the Affordable Care Act, which excluded territories from mandates to establish health insurance exchanges and limited the funds available for doing so.

Currently, 28.7 percent of Virgin Islanders, or about 33,000 people, are without health insurance, compared with 15.8 percent nationally.

The Affordable Care Act provides funding for states, but not territories, to increase Medicaid eligibility by raising the qualifying percentage of the poverty level from 100 percent to 130 percent. Currently, Medicaid is available only to Virgin Islanders who make less than $5,500 per year. In May, the threshold will be raised to $6,500, which is still 50 percent below the federal definition of poverty, according to V.I. Human Services Commissioner Christopher Finch.

New Wave consultants used data from states in the process of overhauling their own systems to create an exchange to determine what the Virgin Islands could afford. The cost of establishing an entirely new informational infrastructure from scratch would be too great.

Because the territory is barred from having the federal government create and implement an exchange - an option many states have chosen - the only remaining option is to network with another state, the report concluded.

The report named Washington, New York, Maryland and the District of Columbia and the New England Consortia as ideal sources for technological support and cited the territory's use of West Virginia's Medicaid Management System to process claims as a model for the technological integration of the territory into a stateside system.

Taetia Phillips-Dorsett, coordinator for the Health Care Reform task force, said the task force had approached four of the five states to see how much a technological partnership would cost. The task force will factor that information into its cost-benefit analysis and make a final report to the governor in March.

The task force will have to weigh the costs associated with paying a state for the use of informational systems against the costs associated with matching 45 percent of expanded Medicaid benefits paid to the territory. The matching rate of 45 percent is set by the federal government and is much higher than for many states with per-capita income levels similar to the Virgin Islands, Phillips-Dorsett said.

States having to build their own exchange information systems from scratch were spending between $30 million and $50 million to do so, she said. The second feasibility study, examining the territory's private insurance market, is due Feb. 18, and the task force will discuss the findings at its next meeting Feb. 28 at Government House on St. Thomas.

Should the territory choose the expanded Medicaid option, income eligibility restrictions would be relaxed, and more people would qualify for coverage. The cost of establishing an exchange would need to be less than the 45 percent paid locally to an expanded pool of Medicaid recipients, Phillips-Dorsett said.

Finch, who also is a member of the task force, said that because income standards for Medicaid eligibility in the territory are set so much lower than in the states, a Virgin Islands health insurance exchange would have to encompass many more uninsured people living at or below the poverty level. That might impact the willingness of private carriers to cooperate in an exchange or affect the rates established by such an exchange, according to Finch.

Phillips-Dorsett declined to say which option the task force was leaning toward, citing the fact that the Value Advisory Group study had not come back yet.

"We really have to take a look at all the data and get the good information on the market analysis coming in from Value Advisory in order to make the best, most informed decision," she said.

Finch said the choice was a difficult and complex one given the territory's needs and the fact that it is not in parity with the 50 states in terms of federal guidance or support in making health care affordable.

"The question is, will we get further by subsidizing the risk of people we fit in by an exchange or by maximizing the number of people covered under Medicaid," he said. "There's not necessarily a really clear answer because there are pros and cons to both methods. At the end of the day, you just want to say which one is going to do the best for increasing the quality and the quantity of indigent health care in the territory."

- Contact reporter Amanda Norris at 714-9104 or email

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