Filed Under:Markets, Employee Benefits

PPACA exchange payments: The journey

A detail from Maryland's premium process flowchart draft. (MHBE graphic)
A detail from Maryland's premium process flowchart draft. (MHBE graphic)

The journey of a dollar bill from a consumer (or the government) to a Patient Protection and Affordable Care Act (PPACA) exchange health plan could take many, many steps.

Managers of Maryland's PPACA exchange have tried to map out that journey in a draft flowchart that shows how exchange program players will set rates and move money through the system.

The federal Centers for Medicare & Medicaid Services (CMS) are responsible for setting up a data hub to help make the premium payment system possible, and state exchange managers and state Medicaid program managers are trying to figure out how to connect their programs with the hub.

The creators of the Maryland draft payment process chart have started with a circle representing the date when a carrier starts the process of getting Maryland Health Connection exchange managers to approve rates and benefits for a "qualified health plan" (QHP) to be sold through through the exchange.

The carrier must then go through several state exchange rate and benefits approval steps and several CMS rate and benefits approval steps.

Once a consumer signs up for coverage, someone has to feed the enrollment data into a carrier data store and an exchange data store. The state must determine whether the consumer will get tax subsidy benefits and other types of help.

The carrier must tell everyone whether the consumer actually sends in the first payment for the QHP coverage or fails to send in the first payment and fails to actually get coverage.

CMS is supposed to get reports every month, calculate the premium tax credit payments, record the tax credit payments and send exchange program payment approvals.

The Internal Revenue Service (IRS) is in charge of processing the electronic fund transfers, sending tax credit payments to the carriers, and sending payment confirmations to CMS.

At the end of the journey of the QHP premium dollar, the dollar goes to the carrier, and payment information notices go to the carrier and the exchange.

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