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Idaho Department of Insurance Health Insurance Exchange Working Group Presentation
October 9, 2012
Agenda
1
Introductions
2
About KPMG
3
Project Objectives and Scope
4
Current Project Status
5
PPACA/HBE Landscape
6
Idaho’s Options, Benefits and Constraints
7
Option Impact on Idaho’s Current Insurance Market
8
Exchange Cost Model Analysis
9
Questions and Answers
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
1
DRAFT FOR DISCUSSION PURPOSES ONLY
Introductions
With you today…
Project Team ■ Andy Gottschalk – Partner, Project Partner ■ Sandy McBride – Partner, Exchange Cost Modeling Team Lead ■ Robert Mitchell – Director, Project Manager
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
3
DRAFT FOR DISCUSSION PURPOSES ONLY
About KPMG
Who we are - A leader in the Public Sector Serving 2,300 Government Clients for 80 Years ■ Serving one-third of the nation’s “billion dollar entities”
KPMG LLP US • 87 offices • $5.4 billion in revenues • 23,000 professionals
■ 3,000 professionals focused on serving the public sector ■ Long-term, deep commitment to state and local government
How Do We Differ? ■ Business and IT architecture consulting services to state and local governments, with a particular emphasis on HHS organizations ■ Serving15 states that are currently moving forward with implementation of a Health Insurance Exchange/Integrated Eligibility solution ■ Serving government clients in the understanding of human service program rules and compliance requirements ■ Substantial experience with Enterprise Architecture and large program roap planning ■ KPMG’s Health and Human Services Architecture Toolkit
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
5
DRAFT FOR DISCUSSION PURPOSES ONLY
KPMG is one of the most active State HBE consulting firms KPMG s 15 states in their HBE efforts and is in discussions to assist others. KPMG is not a System Integrator or product vendor – we advise states objectively on strategy and plans, software and SI selection, and help with PMQA during implementation.
States that KPMG assisted with HBE implementation planning and execution
States that KPMG has met with to discuss HBE plans
Our engagement with individual states and CMS/CCIIO provides KPMG with insights of the latest emerging trends and evolving models that are being adopted across the country © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
6
DRAFT FOR DISCUSSION PURPOSES ONLY
Project Objective and Scope
Objective and scope Objective Assist DOI assess the various health insurance exchange options and how they might affect the State of Idaho.
Scope KPMG assisted DOI in the following areas: ■ Developing this feasibility study to assist DOI in making an informed decision on selecting which of the three Exchange models or a combination thereof ■ Providing an overview of the benefits and constraints ■ Providing cost models for each Exchange model based on prior experience with Exchange architecture blueprints, roaps, and costed implementation plans ■ Assisting with assumptions pertaining to the requirements and contents of a Federallyfacilitated Exchange
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
8
DRAFT FOR DISCUSSION PURPOSES ONLY
Current Project Status
Project Status ■ Conducted project kickoff ■ KPMG provided the initial data request to the State
– The State responded with numerous data sources and artifacts. ■ Convened two data sourcing/assumptions calls with the State ■ Conducted a ½ day working session with the State to confirm assumptions and review outputs ■ Assessed potential impacts to Idaho’s insurance marketplace ■ Developed assumptions for the three Exchange option and created cost models ■ Aligned the KPMG Exchange Reference Architecture (KERA) to Idaho’s HIE Architecture ■ Developed this Working Group presentation and documenting the benefits/advantages of each model and the potential impacts to the Idaho marketplace. – Providing additional cost model artifacts (estimating assumptions and details) in a separate appendix
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
10
DRAFT FOR DISCUSSION PURPOSES ONLY
KPMG assessed four Exchange options for Idaho for October 2013 Option 1 – Develop a State Based Exchange (SBE) Option 2 – Leverage the Federally Facilitated Exchange (FFE) Option 3 – Leverage a Federal-State Hybrid/Partnership Exchange (Hybrid) Option 4 – Initially Leverage the FFE or Hybrid Exchange and Transition to a SBE
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
11
DRAFT FOR DISCUSSION PURPOSES ONLY
PPACA/HBE Landscape
PPACA/HBE Landscape ■ Several states are moving forward with State Based Exchanges. For example: – CO, NV, CA, WA, CT, RI, VT, MD (among others)
– Each has secured additional grant funding to move forward with their initiatives ■ Level 1 or 2 Exchange Establishment Grants (for HIX efforts) ■ Expedited Advance Planning Documents (EAPD) for the Medicaid/CHIP portions – Many have engaged a Systems Integrator (SI) and other vendors to help – Reuse of components and artifacts being advocated by CMS/CCIIO ■ Other states are still planning and assessing their options ■ Each state must declare its intentions via an Exchange Blueprint by 11/16/12 – Select one of the three models ■ Each Exchange option has potential costs for states
■ Exchange implementation deadlines have not changed: – October 1, 2013 – January 2014 – Sustainable by January 2015
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
13
DRAFT FOR DISCUSSION PURPOSES ONLY
Reuse of other State Solutions - Today ■ The amount of the Exchange Establishment Grants and EAPDs awarded to states vary based on the complexity of their systems and degree of reuse. – Existing system capabilities – Extent of outsourcing of key activities – Degree of integrated eligibility envisioned for other HHS programs – Not always an “apples to apples” comparison between states ■ Grant/EAPD awards can have combined values of over one hundred million dollars
■ All states that are currently building a SBE are totally immersed in that process – Very limited bandwidth to other states beyond sharing artifacts – Nothing is really “reusable” from a systems implementation perspective due to the tight timeframes and associated federal reviews – no working solutions yet, just “work in process”
■ Not currently practical to assume the ability to simply re-task another state’s solution to meet the deadlines – Dis-similar architectures and infrastructures – Staff capability mis-matches ■ Qualified System Integrator resources are becoming scarce – Development/implementation costs moving up © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
14
DRAFT FOR DISCUSSION PURPOSES ONLY
Reuse of other State Solutions – Going forward ■ After the October 2013 deadline, states that implemented a SBE will have more bandwidth to other states beyond sharing artifacts ■ Reusable systems implementation components from working solutions should be available to states choosing to transition to a SBE – Complete MAGI and other business rules – Host-able software services (eligibility, online shopping, plan management) ■ Potential ability to re-task another state’s solution to Idaho’s goals
– “Proven” technology that s other SBEs ■ Must address diverse architecture and infrastructure configurations ■ Staff may need training to chosen configuration ■ System Integrator resources will begin to free-up ■ Development/implementation costs should stabilize
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
15
DRAFT FOR DISCUSSION PURPOSES ONLY
Idaho’s Options, Benefits and Constraints
Idaho’s Options ■ Given the considerable risks and limited probability of success, we believe that is impractical for Idaho to consider building a SBE to meet the October 1, 2013 deadline: – Too many complex decisions are needed in a short time period (e.g., governance structure, enabling legislation, procurement considerations) – No way to create and propose a defensible State Based Exchange (SBE) Blueprint submission – Dwindling availability of qualified SI resources ■ Therefore, for the October 1, 2013 deadline, Idaho can initially choose between two options: – Leverage the Federally Facilitated Exchange (FFE) – Employ the Hybrid Model (e.g., leverage the FFE and maintain control over plan management and/or customer outreach) ■ Each option has certain benefits and constraints for Idaho to consider (described later)
■ KPMG developed cost models for each of the 3 primary options plus a 4th scenario: – Leverage the Hybrid solution on a temporary basis and transition to a SBE at some point in the future ■ The “transition to SBE” scenario lowers many of the system implementation risks, but still requires Idaho to determine which approach will be taken to determine Medicaid and CHIP eligibility (among other requirements). © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
17
DRAFT FOR DISCUSSION PURPOSES ONLY
State Requirements The following activities will be required by HHS as part of a FFE or Hybrid Exchange operation: Interfacing with State agencies and databases to collect and/or information necessary to determine Medicaid, CHIP, and APTC eligibility, including:
o State Medicaid and CHIP agency o State wage information collection agency o State unemployment benefits agency Communication of State thresholds and/or policies regarding:
o FPL o Medicaid and CHIP eligibility rules State Medicaid system will have to be made MAGI compliant ACA requires that all applicants for Medicaid determined ineligible be screened for APTC eligibility Continued regulatory role of issuers and health plans Confirmation of issuer licensure and good legal standing to certify QHPs Transmission and receipt of information in electronic format © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
18
DRAFT FOR DISCUSSION PURPOSES ONLY
Option Benefits/Constraints Summary Option # 1
2
Description State Based (SBE)
Benefits Idaho maintains control over its insurance
marketplace Idaho maintains control over subsidized insurance, Medicaid and CHIP eligibility determination It is “Idaho’s Exchange” Opportunity to move to a single eligibility determination service with enhanced funding
Constraints
Most expensive option Limited chance of success by deadline Highest implementation risk Major project and associated risks Reliant on limited SI resources Potentially requires a new entity and multiple ing FTEs and infrastructure investments Required to be self-sustaining in 2015
Federally Idaho not responsible for successful Federal government has prominent role in Idaho’s Facilitated implementation of FFE health insurance market Exchange (FFE) Least expensive option Idaho does not control subsidized insurance or Less FTEs required initial MAGI Medicaid and MAGI CHIP eligibility No new entity required screening (depending on approach) Idaho not required to make Exchange self- Federal government controls insurance plans and sustaining customer service aspects of the Exchange Potentially less plan choices for Idaho’s citizens after the first year Idaho still has costs and ability Moderate implementation risk
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
19
DRAFT FOR DISCUSSION PURPOSES ONLY
Option Benefits/Constraints Summary Option # 3
Description Hybrid Exchange
Benefits Idaho not responsible for successful
4
Transition to SBE from Hybrid
implementation of FFE Idaho controls insurance plan management and customer service aspects of the Exchange Moderate cost option Limited FTEs required Can be housed in an existing entity Idaho not required to make Exchange selfsustaining
Idaho responsibilities and risks for successful
implementation of initial Hybrid Exchange are limited – main responsibility lies with Federal government Allows Exchange market technical solutions to stabilize prior to implementation of SBE Increases potential re-usability of other state solutions Less FTEs initially required Initially a lower to moderate cost option Funding options available through first year of operations (available through at least 2017)
Constraints Requires some staff investment Idaho does not control subsidized insurance or
initial MAGI Medicaid and MAGI CHIP eligibility screening (depending on approach) Federal government has a role in Idaho’s health insurance market Moderate implementation risk
Federal government initially has prominent role
in Idaho’s health insurance market and Must eventually be self sustaining Still requires a significant project effort to implement Potentially requires a new entity Will require FTE and technical infrastructure investments Moderate implementation risk
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
20
DRAFT FOR DISCUSSION PURPOSES ONLY
Option Impact on Idaho’s Current Insurance Market
Impact of Exchange Models on Idaho’s Current Insurance Market State Based Exchange ■ Oversight and regulation can be tailored to specifics of Idaho market and remain consistent with the rest of the market outside of the Exchange ■ Likely to allow for continuation of current, familiar payors ■ Can leverage the roles of existing agencies to accomplish some Exchange tasks, though care should be taken to avoid conflict of interest ■ Likely to allow for smoother transitions as churn in and out of Medicaid, CHIP and private insurance ■ Will be very difficult to devote the resources and be up and running in time ■ Depending on governance structure of a State Exchange (centralized model vs. distributed model), the State may have significantly more up front costs associated with collecting and reviewing data related to risk adjustment ■ Given current time lines and attestation requirements, there is significant schedule risk associated with implementing a State-based Exchange from a business and IT perspective
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
22
DRAFT FOR DISCUSSION PURPOSES ONLY
Impact of Exchange Models on Idaho’s Current Insurance Market Federal Exchange ■ Self-sustaining by 2015 without as much effort by State ■ Fewer compliance concerns since operating on the Federal Exchange ■ Some input into regulations, however final decisions are retained by the Federal government ■ Loss of control of regulations may cause rough transitions from current market oversight by State ■ Doesn’t leverage existing relationships with other State departments ■ State still responsible for enrollment reconciliation, and investment in data interchanges to the Federal solution will be required ■ Is not in agreement with stakeholder , and may impair the State’s ability to maintain a collaborative approach ■ Gives up control over which payors will participate in the marketplace
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
23
DRAFT FOR DISCUSSION PURPOSES ONLY
Impact of Exchange Models on Idaho’s Current Insurance Market Federal-State Hybrid Option ■ Gains some flexibility and input while leveraging the economies of scale of Federal Exchange ■ Allows for the State to retain control while mitigating risk of meeting Federal deadlines ■ Allows more oversight of plan qualification, consumer assistance or both
Federal reinsurance and risk adjustment ■ Under the SBE model, States can choose to leverage the Federal reinsurance and risk adjustment procedures or operate themselves ■ Under the FFE or Hybrid model, States must leverage the Federal risk adjustment procedures ■ May be difficult to deliver transparency to the marketplace when Federal processes are unknown or unclear ■ Reinsurance is an option in all three models
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
24
DRAFT FOR DISCUSSION PURPOSES ONLY
Exchange Cost Model Analysis
Estimating Model s all dimensions of Business Improvement Initiatives Guiding Principles: • Business improvement results are achieved through alignment of people, process (practices) and technology. • Enterprise Architecture ensures alignment and integration • Business Architecture is the unifying design discipline to ensure business design aligns with strategy. • IT Architecture is the unifying design discipline to ensure IT solutions are aligned with business, integrated, and life cycle cost optimized.
• Effective Transformation requires deft choreography of and between top down and bottom up activities. Transformation scope includes: • New legislation, regulation, policy.
Results
• New program and service delivery strategies. • New business processes, practices, behaviors. • New roles, skills. • Job re-design, organization re-design.
• New information, systems, technology required to the improvements. • New processes and procedures required to use the new I&IT solutions. © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
26
DRAFT FOR DISCUSSION PURPOSES ONLY
Idaho is at the beginning stage of a highly iterative transformation process to stand up a Health Benefits Exchange Enterprise Architecture (Blueprint and Roap)
We are here!
High Level Component Design
Benefits Realization (Evaluation)
Detailed Component Design
Detailed Component Implementation
NOTES: The life cycle is iterative
Each initiative goes through this life cycle, but not at the same time! Initiatives usually address a set of inter-related “components”
Operate / / Maintain
Recommended internal gates
Life Cycle aligned with Federal Guidance
Federal Gates and Reviews
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
27
DRAFT FOR DISCUSSION PURPOSES ONLY
Structure of Cost Model – Initiatives, Projects & Work Packages ensure a comprehensive roap and plan, and provide sound Mgmt Structure
Business Improvement Initiatives
Strategic
Projects
Exploits current technologies in the short term – ultimately to be replaced
Tactical
Work Packages (WPs)
Directly implements business strategies and/or target technologies
DAC – Delivery of Application Component (Reqmts/Design/Build/Configure/Impl WPs) DCS – Delivery of Commercial Software (S/W Acquisition WPs – ing DAC)
These work packages map directly to Architecture Components
DBB – Delivery of Building Block Software (S/W Acquisition WPs - Technical Level) DIN – Delivery of Infrastructure (Acquire and implement infrastructure WPs) DSI – Delivery of System Integration (Current System Integration with new Components WPs) CWP - Conversion WPs
These WP’s Represent other work req’d
EIT – Enabling - IT (WPs for IT related enabling work) EBU – Enabling - Business (WPs for Business related enabling work)
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
28
DRAFT FOR DISCUSSION PURPOSES ONLY
Planning Assumptions The team developed the following assumptions to facilitate cost model development: ■ Business Model based on standard reference business architecture with Idaho input ■ Technology Architecture based on standard reference IT architecture with Idaho input ■ Internal and external rate assumptions based on KPMG experience and Idaho input ■ Expected s, transaction volumes, annual growth based on Idaho input ■ Expected service level requirements based on KPMG experience
■ Representative hardware and software product costs based on KPMG experience ■ Estimated level of complexity of systems, business rules, data based on KPMG experience ■ Degree of re-use of software and existing systems based on KPMG experience KPMG’s experience is derived directly from other HBE engagements in most cases. Our engagements with individual states and CMS/CCIIO provides KPMG with insights of the latest emerging trends and evolving models that are being adopted across the country, as well as realistic estimates of work effort and cost.
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
29
DRAFT FOR DISCUSSION PURPOSES ONLY
Initial cost estimates were based on the KPMG Exchange Reference Architecture (KERA) – based on Federal Guidance class HIX - Reference Business Op...
Legend Aligned with the CMS ERA
class HIX - Reference Business Operating Model V03 Reference Health Insurance Exchange Business Operating Model
Management Processes
Core Processes
Delivery Processes
Policy & Oversight
Eligibility & Enrollment
Customer Service
Governance & Management
Individual Eligibility & Enrollment
Individual Responsibility Exemption
Customer
SHOP Exchange Employee Eligibility & Enrollment
SHOP Exchange Employer Eligibility & Enrollment
Broker/ Navigator Relationship Management Enrollee Survey Publication
Plan Management
Resource Management
Issuer and Plan Details Establishment and Monitoring
Plan & Rules Management Communications Outreach xxx
Financial Management APTC and CSRs Data Reporting
Data Collection
Processing
Risk Spreading Calculations
Communications Rules Management
Notifications
Issuer Payment Transfers
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
30
DRAFT FOR DISCUSSION PURPOSES ONLY
Idaho has three possible options to establish a Health Insurance Exchange that meets the PPACA’s requirements Key Business Functions (from KERA)
State-Based Exchange
Hybrid Exchange
FederallyFacilitated
Federal HHS
Federal HHS
Idaho Liaison
Idaho Liaison
Federal HHS
Federal HHS
Idaho Liaison
Idaho Liaison
Policy and Oversight
Idaho
Eligibility & Enrollment Operations
Idaho
Plan Management
Idaho
Idaho
Federal HHS
Financial Management
Idaho
Federal HHS
Federal HHS
Other Operations
Idaho
Federal HHS
Federal HHS
Reinsurance
Idaho
Idaho
Idaho
Risk Adjustment
Idaho
Federal HHS
Federal HHS
IT Operations
Outsourcer
Federal HHS
Federal HHS
Customer Service
Idaho
Federal HHS
Federal HHS
Outsourcer
Federal HHS
Federal HHS
Idaho
Idaho Liaison
Federal HHS
Center
Outreach
Decisions on how to operate under each model still need to be made. The table illustrates our planning assumptions. © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
31
DRAFT FOR DISCUSSION PURPOSES ONLY
The number of additional Idaho resources required varies depending on the level of Idaho control over the Exchange State-Based Exchange Policy and Oversight
4
Eligibility & Enrollment Operations
2
Plan Management
2
Financial Management
2
Other Operations
1
Hybrid Exchange
FederallyFacilitated
2.5
**
**
**
2
Reinsurance
*
*
*
IT Management
2
*
*
IT Operations
TBD
Customer Service
1
Center
13
Outreach Additional Idaho Resources
3
3
30
7.5
0
*Reinsurance and Risk Management will be managed as part of normal operations for the Idaho Department of Insurance **Idaho Liaison and Leadership will be provided as part of normal operations by the Department of Insurance © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
32
DRAFT FOR DISCUSSION PURPOSES ONLY
For cost estimation purposes, market prevalent technology packages were used to estimate the cost to the State of Idaho State-Based Exchange
Hybrid Exchange
FederallyFacilitated
Microsoft Dynamics
FFE
FFE
Eligibility & Enrollment Operations
Oracle Siebel
FFE
FFE
Plan Management
Oracle Siebel
SERFF
FFE
FFE
FFE
Oracle Siebel
FFE
FFE
Reinsurance
N/A
N/A
FFE
Risk Management
N/A
N/A
FFE
IT Operations
BMC Remedy
FFE
FFE
Customer Service
Oracle Siebel
FFE
FFE
Microsoft Lync
FFE
FFE
Oracle Siebel
Oracle Siebel
FFE
Policy and Oversight
Financial Management Other Operations
Center
Outreach
Microsoft Dynamics Healthation*
*Healthation will manage financial transactions relating to insurance s Microsoft Dynamics will manage financial s for the exchange organization FFE: Technology stack for the Federally-facilitated Exchange is currently under evaluation U.S. Department of Health and Human Services © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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DRAFT FOR DISCUSSION PURPOSES ONLY
Uninsured Population Assumptions The team developed the following population assumptions to facilitate cost model development: ■ Expected uninsured persons in Idaho: 158,600 (12,300 Medicaid, 146,300 ACA) ■ Expected transaction volumes, annual growth – New Consumers (ACA and Medicaid): 25%* – New Employers: 2% ■ Expected s of the exchange: – Exchange Operators: 30 – Brokers: 5,600 – Navigators: 100 (In-Person Assistors: 50)
– Consumers: 270,200 (146,300 ACA eligible, 123,900 Medicaid eligible) – Small Business Employers: 38,200 – Insurance Carriers – up to 14 *Represents the number of new citizens eligible for ACA/Medicaid. This number is significantly lower than the number of net new ACA/Medicaid eligible citizens as it is expected a portion will improve their income situation and eliminate their need to Medicaid or an ACA-based plan. © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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DRAFT FOR DISCUSSION PURPOSES ONLY
Schedule Assumptions NOTES: The timeline illustrated below for Option 1 applies to all Options. Initial (Minimum functionality) release deadline Oct. 1 2013. Additional required functionality can be delivered in a second release in 2014. Federal HIX funding available until end of 2014. Initial Operations (Startup) are funded by the Establishment Grant. State Based HIX needs to be self-sustaining by 2015. This schedule is extremely aggressive. 2012 Level
NAME
2013
12Q1 12Q2 12Q3 12Q4 13Q1
13Q2
2014
13Q3
13Q4
14Q1
14Q2
2015
14Q3
14Q4
~
~
~
~
~
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
15Q1
15Q2
15Q3
15Q4
1
State-based HIX Implementation
~
~
~
~
2
State-based HIX Release 1 - Implementation
`
`
`
`
2
State-based HIX Release 2 - Implementation
2
State-based HIX Program Management, Integration and
`
`
`
2
State-based HIX Operational Startup (part of Establishment Grant)
`
`
`
1
State-based HIX Operation
~
~
~
~
2
State-based HIX Operation (post Establishment Grant)
`
`
`
`
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
35
DRAFT FOR DISCUSSION PURPOSES ONLY
Cost model estimates – Option 1 – State Based Exchange Cost includes design and implementation of all minimally ACA required systems and business capabilities Assumes a standalone organization separate from DOI Based on previous estimates developed for various states Timeline is extremely short for this level of effort (average of approx. 125 FTEs over the 2 year implementation timeline, peak above 200 FTEs) The potential to re-use proven solutions from other states is minimal at best – all states are still in development and will be right up to the Oct. 2013 deadline The risk of failing to meet the schedule is SIGNIFICANT
Initiative Name
External Resource Costs
Internal Resource Costs
Hardw are
Softw are
Other Costs
Total Im plem entation Cost
State-based HIX Implementation
$55,596,222
$6,708,055
$1,397,400
$7,407,482
$6,207,674
$77,316,833
State-based HIX Release 1 - Implementation
$24,705,294
$2,756,588
$1,286,200
$7,407,482
$51,250
$36,206,814
State-based HIX Release 2 - Implementation
$19,752,828
$2,186,795
$111,200
$0
$41,250
$22,092,074
$9,713,100
$663,132
$0
$0
$2,800,250
$13,176,482
$1,425,000
$1,101,540
$0
$0
$3,314,924
$5,841,464
State-based HIX Operation
$6,380,438
$1,551,636
$413,880
$1,503,062
$118,900
$9,967,916
State-based HIX Operation (post Establishment Grant)
$6,380,438
$1,551,636
$413,880
$1,503,062
$118,900
$9,967,916
State-based HIX Program Management, Integration and State-based HIX Operational Startup (part of Establishment Grant)
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
36
DRAFT FOR DISCUSSION PURPOSES ONLY
Cost model estimates – Option 2 – Federally Facilitated Exchange NOTES: The Federal Facilitated Exchange estimates is based on the integration required between State based Medicaid Eligibility Systems and The Federal Exchange, and the requirement to report on referrals from the Federal Exchange to State Medicaid. It also assumes that the State provides input into the federal exchange, particularly in of Eligibility, Plan Management, and Outreach to insurers, clients and employers. Estimates include state provision of requirements to the federal exchange, and integrating with federal and state systems as required. It is assumed that any operating cost impact will be absorbed by the state.
Initiative Name
External Resource Costs
Internal Resource Costs
Hardw are
Softw are
Other Costs
Total Im plem entation Cost
Federal facilitated HIX Implementation
$4,430,197
$490,398
$0
$0
$200,000
$5,120,595
Federal-facilitated HIX Release 1 - Implementation
$4,100,797
$443,634
$0
$0
$0
$4,544,431
$329,400
$46,764
$0
$0
$200,000
$576,164
Federal facilitated HIX Operation
$0
$0
$0
$0
$0
$0
Federal-facilitated HIX Operation
$0
$0
$0
$0
$0
$0
Federal-facilitated HIX Program Management, Integration and
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Cost model estimates – Option 3 – Hybrid Exchange NOTES: The Hybrid Exchange is based on leveraging existing capabilities rather than setting up a new Exchange organization and systems. Estimates include state provision of requirements to the federal exchange, building selected functions, and integrating with federal and state systems as required.
Initiative Name Federal-State HIX Implementation
External Resource Costs
Internal Resource Costs
Hardw are
Softw are
Other Costs
Total Im plem entation Cost
$11,143,225
$1,994,375
$349,350
$655,478
$1,357,482
$15,499,909
$7,378,525
$898,905
$349,350
$655,478
$165,550
$9,447,807
$3,358,200
$4,330
$0
$0
$750,000
$4,112,530
$406,500
$1,091,140
$0
$0
$441,932
$1,939,572
Federal-State HIX Operation
$767,813
$623,851
$139,740
$131,096
$30,340
$1,692,839
Federal-State HIX Operation
$767,813
$623,851
$139,740
$131,096
$30,340
$1,692,839
Federal-State Hybrid HIX Release 1 - Implementation Federal-State Hybrid HIX Program Management, Integration and Federal-State Hybrid HIX Operational Startup (part of Establishment Grant)
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Cost model estimates – Option 4 – Hybrid Exchange Transitioning to State Based Exchange This option assumes that the Hybrid Exchange will be built as defined in Option 3, followed by the implementation of a State Based Exchange within approximately 2-3 years following the Hybrid implementation.
It is assumed that the SBE implementation will take advantage of Federal Exchange Establishment funding. The cost of the Hybrid Exchange will be unchanged from Option 3 - $15.5M. The cost of implementing the SBE at a later date offers the opportunity to leverage and re-use early SBE implementations. The cost avoidance of this approach should be at least $10-15M – so the SBE developed following Hybrid Exchange Implementation should cost approx. $62.3-$67.3M. Estimated TOTAL COST of this option: $77.8-$82.8M
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Comparison Of Options Scenario Option 1
Implications Year
Cost
Design & Impl
$77M
State Based Exchange
ANNUAL OPS
$10M
2
Design & Impl
$5.1M
ANNUAL OPS
$0
Design & Impl
$15.5M
Federally Facilitated Exchange 3 Hybrid Exchange 4 Interim Hybrid Exchange Transition to State Based
ANNUAL OPS
$1.7M
Design & Impl
$82.8M
ANNUAL OPS
$10M
BENEFITS ■ State controls the entire Exchange
■ Low cost, low risk
CONSTRAINTS ■ Very late start ■ Large and complex initiative ■ Little opportunity to leverage existing solutions ■ Expensive ■ Federally controlled ■ May be difficult to change later ■ Funding opportunity foregone
■ State influences the market and the consumer ■ Modest investment and operation
■ State influence is limited
■ Relatively low initial risk ■ State eventually controls the entire exchange ■ Can learn from other SBEs before going there
■ Longer duration ■ More change to manage over a longer time period
PMPM
$3
Unknown $0.52 (state share) Fed share unknown
% Success
VERY LOW
HIGH – dependent on Fed Gov
Medium
Medium $3
Per Member Cost based on estimate of 270,000 s © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Questions and Answers
APPENDIX - Planning Method
Roap Planning and Estimating Process PORTFOLIO LEVEL (if planning and estimating multiple initiatives) Target Business Model
Develop Implementation Strategy
Recommended Design Option
Assemble Consolidated Portfolio Roap
Prioritize
Optimize
Identify Business Improvement Initiatives
Target Automation Architecture Current Automation Inventory
Establish General Estimating Assumptions
PER INITIATIVE Define Application Releases
Count Application Function Points
Identify Automation Architecture Work Packages
Identify Business Change & Enabling Work Packages
Schedule Projects
Group Work Packages Into Projects
Estimate Work Packages
Develop & Document Work Package Estimating Assumptions
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Adjust Estimates & Schedule
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Estimating Application Component Complexity and Work Effort All Application Components are estimated in of functional complexity •Each Application Component is defined in of the business processes it s •Each process is mapped to the high level entities in the Conceptual Data Model
•This is the CRUD Matrix (each cell indicates whether the process Creates, Reads, Updates, or Deletes instances of each Entity) •The CRUD matrix is the key input to a function point count
The COSMIC-FFP method is the method used for function point counting (ISO/IEC standard 19761:2003) •The functional complexity of each process is calculated based on the CRUD, plus estimates of I/O, interface I/O, and rules complexity •The functional complexity of an Application Component is the sum of the function point counts of its processes
Work Effort is estimated based on Productivity assumptions •The number of work days per function point assumed to specify, design, build/configure, test and implement •COCOMO II is a key source we use for productivity assumptions (Common Cost Model) © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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The KERA Logical Component Architecture is derived from CMS guidance and complemented by HIE leading practices class HIX - Reference Logical Functional... class HIX - Reference Logical Functional Ov erv iew V02 - updated w ith NJ
Exchange Components Technical Components
Business Components Business Management Components
Core Business & Service Delivery Components Insurance Plan Management
IT Management Service Desk Management
Eligibility & Enrollment Operations
Financial ing & Reporting
Eligibility Assessment
Broker/Navigator Relationship Management
Comparison Shopping
Marketing & Outreach
Financial Management
Legend
Channel Interface Components
Suggested KERA Process Group
Unified Communications
ERA Process Group
Risk Management Technical Management
Asset Management & Tax Credit Processing
IT Operations Management
Human Resource Management
Application Management
Procurement Management
Exchange Portal
s Payable Processing
s Receivable Processing
Enrollment Processing
Customer Service & Management
Appeals Management
Business Components Information Management Records and Document Management
Business Intelligence
Reporting
Knowledge Management
Workflow and Rules Management
System Integration Management
Content Management
Business Process Management
Master Person Registry
Integration Management
Metadata Management
Business Rules Management
Financial Transaction Processing
Integration Content Processing
Integration Broker
Technical Components Privacy and Security Identity and Access Management Identity Management
Privilege Management
Authentication
Authorization
Intrusion Management Digital Signatures
Intrusion Detection
Intrusion Prevention
Audit
Confidentiality Management
Workflow and Rules Processing
Data Management
Encryption
Business Rules Engine
Data Indexing & Storage
Anonymization
Workflow Engine
Data Transformation
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Data Retrieval
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Combination of the KERA component model and Idaho’s components yields a consolidated deployment model for a state-based exchange class Deployment Model V01
External Network
Perimeter Network
Internal Network
Public Zone (PZ)
Public Access Zone (PAZ)
Operating Zone (OZ)
Demilitarized Zone (DMZ) / Presentation Tier
Restricted Zone (RZ)
Data Tier
Application Tier Business Management Serv er Serv ice Deliv ery Serv er IT Management
External s
Portal Application Serv er
Service Desk Management
Technical Management
IT Operations Management
Application Management
Eligibility & Enrollment Operations Enrollment Processing
Eligibility Assessment
Broker/Navigator Relationship Management
Marketing & Outreach
Comparison Shopping
Customer Service & Management
Exchange Portal
Human Resource Management
Web Serv er
Unified Communications Serv er
Master Person Registry
Unified Communications
& Tax Credit Processing
Data Subjects:
Data Management Data Indexing & Storage
Data Retrieval Financial Transaction Processing Serv er
Data Transformation Serv er
Appeals Broker / Navigator HHS Plan Carrier HIX Customer Enrollment Price Quotation Financial
Data Management
Financial Transaction Processing
Financial Management
Appeals Management
Financial ing & Reporting
Procurement Management
HIX Database Serv er
Master Person Registry Serv er
Data Transformation Business Process Management Database Serv er
Risk Management
Asset Management
Data Management Data Indexing & Storage
Data Subj ects:
Workflow Business Rules
Internet Firew all 1
Firew all 2
Data Retrieval
Intergration Serv er Secure File Transfer Protocol (SFTP) Serv er
System Integration Management Integration Management
Integration Content Processing
Integration Broker
Firew all 3
Know ledge Management Database Serv er
External Systems Insurance Plan Management
Data Management
Data Subjects:
SSL VPN Serv er Know ledge Management Serv er
Information Management Serv er
Knowledge Management Metadata Management
Content Management
Intrusion Management Serv er
Information Management Records and Document Management
Business Intelligence
Intrusion Management Reporting
Intrusion Prevention
Audit
Confidentiality Mgmt Serv er Confidentiality Management
Data Indexing & Storage
Data Retrieval
Encryption
Content Metadata
Data Subjects: Master Aggregate
Intrusion Detection Anonymization
System Integration Management Database Serv er Workflow and Rules Processing / Management Serv er
class Deployment Model V01
Legend
Data Management
Identity and Access Management Serv er Workflow and Rules Management
Workflow and Rules Processing
Business Process Management
Business Rules Engine
Business Rules Management
Workflow Engine
Data Indexing & Storage
Identity and Access Management Identity Management
Privilege Management
Authentication
Authorization
Digital Signatures
Data Subjects: Event logs Audit history
Data Retrieval
KERA Component ERA Component Idaho Unique Component
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Thank you
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are ed trademarks or trademarks of KPMG International.
October 9, 2012
Agenda
1
Introductions
2
About KPMG
3
Project Objectives and Scope
4
Current Project Status
5
PPACA/HBE Landscape
6
Idaho’s Options, Benefits and Constraints
7
Option Impact on Idaho’s Current Insurance Market
8
Exchange Cost Model Analysis
9
Questions and Answers
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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DRAFT FOR DISCUSSION PURPOSES ONLY
Introductions
With you today…
Project Team ■ Andy Gottschalk – Partner, Project Partner ■ Sandy McBride – Partner, Exchange Cost Modeling Team Lead ■ Robert Mitchell – Director, Project Manager
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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About KPMG
Who we are - A leader in the Public Sector Serving 2,300 Government Clients for 80 Years ■ Serving one-third of the nation’s “billion dollar entities”
KPMG LLP US • 87 offices • $5.4 billion in revenues • 23,000 professionals
■ 3,000 professionals focused on serving the public sector ■ Long-term, deep commitment to state and local government
How Do We Differ? ■ Business and IT architecture consulting services to state and local governments, with a particular emphasis on HHS organizations ■ Serving15 states that are currently moving forward with implementation of a Health Insurance Exchange/Integrated Eligibility solution ■ Serving government clients in the understanding of human service program rules and compliance requirements ■ Substantial experience with Enterprise Architecture and large program roap planning ■ KPMG’s Health and Human Services Architecture Toolkit
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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DRAFT FOR DISCUSSION PURPOSES ONLY
KPMG is one of the most active State HBE consulting firms KPMG s 15 states in their HBE efforts and is in discussions to assist others. KPMG is not a System Integrator or product vendor – we advise states objectively on strategy and plans, software and SI selection, and help with PMQA during implementation.
States that KPMG assisted with HBE implementation planning and execution
States that KPMG has met with to discuss HBE plans
Our engagement with individual states and CMS/CCIIO provides KPMG with insights of the latest emerging trends and evolving models that are being adopted across the country © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Project Objective and Scope
Objective and scope Objective Assist DOI assess the various health insurance exchange options and how they might affect the State of Idaho.
Scope KPMG assisted DOI in the following areas: ■ Developing this feasibility study to assist DOI in making an informed decision on selecting which of the three Exchange models or a combination thereof ■ Providing an overview of the benefits and constraints ■ Providing cost models for each Exchange model based on prior experience with Exchange architecture blueprints, roaps, and costed implementation plans ■ Assisting with assumptions pertaining to the requirements and contents of a Federallyfacilitated Exchange
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Current Project Status
Project Status ■ Conducted project kickoff ■ KPMG provided the initial data request to the State
– The State responded with numerous data sources and artifacts. ■ Convened two data sourcing/assumptions calls with the State ■ Conducted a ½ day working session with the State to confirm assumptions and review outputs ■ Assessed potential impacts to Idaho’s insurance marketplace ■ Developed assumptions for the three Exchange option and created cost models ■ Aligned the KPMG Exchange Reference Architecture (KERA) to Idaho’s HIE Architecture ■ Developed this Working Group presentation and documenting the benefits/advantages of each model and the potential impacts to the Idaho marketplace. – Providing additional cost model artifacts (estimating assumptions and details) in a separate appendix
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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KPMG assessed four Exchange options for Idaho for October 2013 Option 1 – Develop a State Based Exchange (SBE) Option 2 – Leverage the Federally Facilitated Exchange (FFE) Option 3 – Leverage a Federal-State Hybrid/Partnership Exchange (Hybrid) Option 4 – Initially Leverage the FFE or Hybrid Exchange and Transition to a SBE
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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DRAFT FOR DISCUSSION PURPOSES ONLY
PPACA/HBE Landscape
PPACA/HBE Landscape ■ Several states are moving forward with State Based Exchanges. For example: – CO, NV, CA, WA, CT, RI, VT, MD (among others)
– Each has secured additional grant funding to move forward with their initiatives ■ Level 1 or 2 Exchange Establishment Grants (for HIX efforts) ■ Expedited Advance Planning Documents (EAPD) for the Medicaid/CHIP portions – Many have engaged a Systems Integrator (SI) and other vendors to help – Reuse of components and artifacts being advocated by CMS/CCIIO ■ Other states are still planning and assessing their options ■ Each state must declare its intentions via an Exchange Blueprint by 11/16/12 – Select one of the three models ■ Each Exchange option has potential costs for states
■ Exchange implementation deadlines have not changed: – October 1, 2013 – January 2014 – Sustainable by January 2015
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Reuse of other State Solutions - Today ■ The amount of the Exchange Establishment Grants and EAPDs awarded to states vary based on the complexity of their systems and degree of reuse. – Existing system capabilities – Extent of outsourcing of key activities – Degree of integrated eligibility envisioned for other HHS programs – Not always an “apples to apples” comparison between states ■ Grant/EAPD awards can have combined values of over one hundred million dollars
■ All states that are currently building a SBE are totally immersed in that process – Very limited bandwidth to other states beyond sharing artifacts – Nothing is really “reusable” from a systems implementation perspective due to the tight timeframes and associated federal reviews – no working solutions yet, just “work in process”
■ Not currently practical to assume the ability to simply re-task another state’s solution to meet the deadlines – Dis-similar architectures and infrastructures – Staff capability mis-matches ■ Qualified System Integrator resources are becoming scarce – Development/implementation costs moving up © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Reuse of other State Solutions – Going forward ■ After the October 2013 deadline, states that implemented a SBE will have more bandwidth to other states beyond sharing artifacts ■ Reusable systems implementation components from working solutions should be available to states choosing to transition to a SBE – Complete MAGI and other business rules – Host-able software services (eligibility, online shopping, plan management) ■ Potential ability to re-task another state’s solution to Idaho’s goals
– “Proven” technology that s other SBEs ■ Must address diverse architecture and infrastructure configurations ■ Staff may need training to chosen configuration ■ System Integrator resources will begin to free-up ■ Development/implementation costs should stabilize
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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DRAFT FOR DISCUSSION PURPOSES ONLY
Idaho’s Options, Benefits and Constraints
Idaho’s Options ■ Given the considerable risks and limited probability of success, we believe that is impractical for Idaho to consider building a SBE to meet the October 1, 2013 deadline: – Too many complex decisions are needed in a short time period (e.g., governance structure, enabling legislation, procurement considerations) – No way to create and propose a defensible State Based Exchange (SBE) Blueprint submission – Dwindling availability of qualified SI resources ■ Therefore, for the October 1, 2013 deadline, Idaho can initially choose between two options: – Leverage the Federally Facilitated Exchange (FFE) – Employ the Hybrid Model (e.g., leverage the FFE and maintain control over plan management and/or customer outreach) ■ Each option has certain benefits and constraints for Idaho to consider (described later)
■ KPMG developed cost models for each of the 3 primary options plus a 4th scenario: – Leverage the Hybrid solution on a temporary basis and transition to a SBE at some point in the future ■ The “transition to SBE” scenario lowers many of the system implementation risks, but still requires Idaho to determine which approach will be taken to determine Medicaid and CHIP eligibility (among other requirements). © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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State Requirements The following activities will be required by HHS as part of a FFE or Hybrid Exchange operation: Interfacing with State agencies and databases to collect and/or information necessary to determine Medicaid, CHIP, and APTC eligibility, including:
o State Medicaid and CHIP agency o State wage information collection agency o State unemployment benefits agency Communication of State thresholds and/or policies regarding:
o FPL o Medicaid and CHIP eligibility rules State Medicaid system will have to be made MAGI compliant ACA requires that all applicants for Medicaid determined ineligible be screened for APTC eligibility Continued regulatory role of issuers and health plans Confirmation of issuer licensure and good legal standing to certify QHPs Transmission and receipt of information in electronic format © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Option Benefits/Constraints Summary Option # 1
2
Description State Based (SBE)
Benefits Idaho maintains control over its insurance
marketplace Idaho maintains control over subsidized insurance, Medicaid and CHIP eligibility determination It is “Idaho’s Exchange” Opportunity to move to a single eligibility determination service with enhanced funding
Constraints
Most expensive option Limited chance of success by deadline Highest implementation risk Major project and associated risks Reliant on limited SI resources Potentially requires a new entity and multiple ing FTEs and infrastructure investments Required to be self-sustaining in 2015
Federally Idaho not responsible for successful Federal government has prominent role in Idaho’s Facilitated implementation of FFE health insurance market Exchange (FFE) Least expensive option Idaho does not control subsidized insurance or Less FTEs required initial MAGI Medicaid and MAGI CHIP eligibility No new entity required screening (depending on approach) Idaho not required to make Exchange self- Federal government controls insurance plans and sustaining customer service aspects of the Exchange Potentially less plan choices for Idaho’s citizens after the first year Idaho still has costs and ability Moderate implementation risk
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Option Benefits/Constraints Summary Option # 3
Description Hybrid Exchange
Benefits Idaho not responsible for successful
4
Transition to SBE from Hybrid
implementation of FFE Idaho controls insurance plan management and customer service aspects of the Exchange Moderate cost option Limited FTEs required Can be housed in an existing entity Idaho not required to make Exchange selfsustaining
Idaho responsibilities and risks for successful
implementation of initial Hybrid Exchange are limited – main responsibility lies with Federal government Allows Exchange market technical solutions to stabilize prior to implementation of SBE Increases potential re-usability of other state solutions Less FTEs initially required Initially a lower to moderate cost option Funding options available through first year of operations (available through at least 2017)
Constraints Requires some staff investment Idaho does not control subsidized insurance or
initial MAGI Medicaid and MAGI CHIP eligibility screening (depending on approach) Federal government has a role in Idaho’s health insurance market Moderate implementation risk
Federal government initially has prominent role
in Idaho’s health insurance market and Must eventually be self sustaining Still requires a significant project effort to implement Potentially requires a new entity Will require FTE and technical infrastructure investments Moderate implementation risk
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Option Impact on Idaho’s Current Insurance Market
Impact of Exchange Models on Idaho’s Current Insurance Market State Based Exchange ■ Oversight and regulation can be tailored to specifics of Idaho market and remain consistent with the rest of the market outside of the Exchange ■ Likely to allow for continuation of current, familiar payors ■ Can leverage the roles of existing agencies to accomplish some Exchange tasks, though care should be taken to avoid conflict of interest ■ Likely to allow for smoother transitions as churn in and out of Medicaid, CHIP and private insurance ■ Will be very difficult to devote the resources and be up and running in time ■ Depending on governance structure of a State Exchange (centralized model vs. distributed model), the State may have significantly more up front costs associated with collecting and reviewing data related to risk adjustment ■ Given current time lines and attestation requirements, there is significant schedule risk associated with implementing a State-based Exchange from a business and IT perspective
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Impact of Exchange Models on Idaho’s Current Insurance Market Federal Exchange ■ Self-sustaining by 2015 without as much effort by State ■ Fewer compliance concerns since operating on the Federal Exchange ■ Some input into regulations, however final decisions are retained by the Federal government ■ Loss of control of regulations may cause rough transitions from current market oversight by State ■ Doesn’t leverage existing relationships with other State departments ■ State still responsible for enrollment reconciliation, and investment in data interchanges to the Federal solution will be required ■ Is not in agreement with stakeholder , and may impair the State’s ability to maintain a collaborative approach ■ Gives up control over which payors will participate in the marketplace
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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DRAFT FOR DISCUSSION PURPOSES ONLY
Impact of Exchange Models on Idaho’s Current Insurance Market Federal-State Hybrid Option ■ Gains some flexibility and input while leveraging the economies of scale of Federal Exchange ■ Allows for the State to retain control while mitigating risk of meeting Federal deadlines ■ Allows more oversight of plan qualification, consumer assistance or both
Federal reinsurance and risk adjustment ■ Under the SBE model, States can choose to leverage the Federal reinsurance and risk adjustment procedures or operate themselves ■ Under the FFE or Hybrid model, States must leverage the Federal risk adjustment procedures ■ May be difficult to deliver transparency to the marketplace when Federal processes are unknown or unclear ■ Reinsurance is an option in all three models
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Exchange Cost Model Analysis
Estimating Model s all dimensions of Business Improvement Initiatives Guiding Principles: • Business improvement results are achieved through alignment of people, process (practices) and technology. • Enterprise Architecture ensures alignment and integration • Business Architecture is the unifying design discipline to ensure business design aligns with strategy. • IT Architecture is the unifying design discipline to ensure IT solutions are aligned with business, integrated, and life cycle cost optimized.
• Effective Transformation requires deft choreography of and between top down and bottom up activities. Transformation scope includes: • New legislation, regulation, policy.
Results
• New program and service delivery strategies. • New business processes, practices, behaviors. • New roles, skills. • Job re-design, organization re-design.
• New information, systems, technology required to the improvements. • New processes and procedures required to use the new I&IT solutions. © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Idaho is at the beginning stage of a highly iterative transformation process to stand up a Health Benefits Exchange Enterprise Architecture (Blueprint and Roap)
We are here!
High Level Component Design
Benefits Realization (Evaluation)
Detailed Component Design
Detailed Component Implementation
NOTES: The life cycle is iterative
Each initiative goes through this life cycle, but not at the same time! Initiatives usually address a set of inter-related “components”
Operate / / Maintain
Recommended internal gates
Life Cycle aligned with Federal Guidance
Federal Gates and Reviews
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Structure of Cost Model – Initiatives, Projects & Work Packages ensure a comprehensive roap and plan, and provide sound Mgmt Structure
Business Improvement Initiatives
Strategic
Projects
Exploits current technologies in the short term – ultimately to be replaced
Tactical
Work Packages (WPs)
Directly implements business strategies and/or target technologies
DAC – Delivery of Application Component (Reqmts/Design/Build/Configure/Impl WPs) DCS – Delivery of Commercial Software (S/W Acquisition WPs – ing DAC)
These work packages map directly to Architecture Components
DBB – Delivery of Building Block Software (S/W Acquisition WPs - Technical Level) DIN – Delivery of Infrastructure (Acquire and implement infrastructure WPs) DSI – Delivery of System Integration (Current System Integration with new Components WPs) CWP - Conversion WPs
These WP’s Represent other work req’d
EIT – Enabling - IT (WPs for IT related enabling work) EBU – Enabling - Business (WPs for Business related enabling work)
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Planning Assumptions The team developed the following assumptions to facilitate cost model development: ■ Business Model based on standard reference business architecture with Idaho input ■ Technology Architecture based on standard reference IT architecture with Idaho input ■ Internal and external rate assumptions based on KPMG experience and Idaho input ■ Expected s, transaction volumes, annual growth based on Idaho input ■ Expected service level requirements based on KPMG experience
■ Representative hardware and software product costs based on KPMG experience ■ Estimated level of complexity of systems, business rules, data based on KPMG experience ■ Degree of re-use of software and existing systems based on KPMG experience KPMG’s experience is derived directly from other HBE engagements in most cases. Our engagements with individual states and CMS/CCIIO provides KPMG with insights of the latest emerging trends and evolving models that are being adopted across the country, as well as realistic estimates of work effort and cost.
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Initial cost estimates were based on the KPMG Exchange Reference Architecture (KERA) – based on Federal Guidance class HIX - Reference Business Op...
Legend Aligned with the CMS ERA
class HIX - Reference Business Operating Model V03 Reference Health Insurance Exchange Business Operating Model
Management Processes
Core Processes
Delivery Processes
Policy & Oversight
Eligibility & Enrollment
Customer Service
Governance & Management
Individual Eligibility & Enrollment
Individual Responsibility Exemption
Customer
SHOP Exchange Employee Eligibility & Enrollment
SHOP Exchange Employer Eligibility & Enrollment
Broker/ Navigator Relationship Management Enrollee Survey Publication
Plan Management
Resource Management
Issuer and Plan Details Establishment and Monitoring
Plan & Rules Management Communications Outreach xxx
Financial Management APTC and CSRs Data Reporting
Data Collection
Processing
Risk Spreading Calculations
Communications Rules Management
Notifications
Issuer Payment Transfers
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
30
DRAFT FOR DISCUSSION PURPOSES ONLY
Idaho has three possible options to establish a Health Insurance Exchange that meets the PPACA’s requirements Key Business Functions (from KERA)
State-Based Exchange
Hybrid Exchange
FederallyFacilitated
Federal HHS
Federal HHS
Idaho Liaison
Idaho Liaison
Federal HHS
Federal HHS
Idaho Liaison
Idaho Liaison
Policy and Oversight
Idaho
Eligibility & Enrollment Operations
Idaho
Plan Management
Idaho
Idaho
Federal HHS
Financial Management
Idaho
Federal HHS
Federal HHS
Other Operations
Idaho
Federal HHS
Federal HHS
Reinsurance
Idaho
Idaho
Idaho
Risk Adjustment
Idaho
Federal HHS
Federal HHS
IT Operations
Outsourcer
Federal HHS
Federal HHS
Customer Service
Idaho
Federal HHS
Federal HHS
Outsourcer
Federal HHS
Federal HHS
Idaho
Idaho Liaison
Federal HHS
Center
Outreach
Decisions on how to operate under each model still need to be made. The table illustrates our planning assumptions. © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
31
DRAFT FOR DISCUSSION PURPOSES ONLY
The number of additional Idaho resources required varies depending on the level of Idaho control over the Exchange State-Based Exchange Policy and Oversight
4
Eligibility & Enrollment Operations
2
Plan Management
2
Financial Management
2
Other Operations
1
Hybrid Exchange
FederallyFacilitated
2.5
**
**
**
2
Reinsurance
*
*
*
IT Management
2
*
*
IT Operations
TBD
Customer Service
1
Center
13
Outreach Additional Idaho Resources
3
3
30
7.5
0
*Reinsurance and Risk Management will be managed as part of normal operations for the Idaho Department of Insurance **Idaho Liaison and Leadership will be provided as part of normal operations by the Department of Insurance © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
32
DRAFT FOR DISCUSSION PURPOSES ONLY
For cost estimation purposes, market prevalent technology packages were used to estimate the cost to the State of Idaho State-Based Exchange
Hybrid Exchange
FederallyFacilitated
Microsoft Dynamics
FFE
FFE
Eligibility & Enrollment Operations
Oracle Siebel
FFE
FFE
Plan Management
Oracle Siebel
SERFF
FFE
FFE
FFE
Oracle Siebel
FFE
FFE
Reinsurance
N/A
N/A
FFE
Risk Management
N/A
N/A
FFE
IT Operations
BMC Remedy
FFE
FFE
Customer Service
Oracle Siebel
FFE
FFE
Microsoft Lync
FFE
FFE
Oracle Siebel
Oracle Siebel
FFE
Policy and Oversight
Financial Management Other Operations
Center
Outreach
Microsoft Dynamics Healthation*
*Healthation will manage financial transactions relating to insurance s Microsoft Dynamics will manage financial s for the exchange organization FFE: Technology stack for the Federally-facilitated Exchange is currently under evaluation U.S. Department of Health and Human Services © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
33
DRAFT FOR DISCUSSION PURPOSES ONLY
Uninsured Population Assumptions The team developed the following population assumptions to facilitate cost model development: ■ Expected uninsured persons in Idaho: 158,600 (12,300 Medicaid, 146,300 ACA) ■ Expected transaction volumes, annual growth – New Consumers (ACA and Medicaid): 25%* – New Employers: 2% ■ Expected s of the exchange: – Exchange Operators: 30 – Brokers: 5,600 – Navigators: 100 (In-Person Assistors: 50)
– Consumers: 270,200 (146,300 ACA eligible, 123,900 Medicaid eligible) – Small Business Employers: 38,200 – Insurance Carriers – up to 14 *Represents the number of new citizens eligible for ACA/Medicaid. This number is significantly lower than the number of net new ACA/Medicaid eligible citizens as it is expected a portion will improve their income situation and eliminate their need to Medicaid or an ACA-based plan. © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
34
DRAFT FOR DISCUSSION PURPOSES ONLY
Schedule Assumptions NOTES: The timeline illustrated below for Option 1 applies to all Options. Initial (Minimum functionality) release deadline Oct. 1 2013. Additional required functionality can be delivered in a second release in 2014. Federal HIX funding available until end of 2014. Initial Operations (Startup) are funded by the Establishment Grant. State Based HIX needs to be self-sustaining by 2015. This schedule is extremely aggressive. 2012 Level
NAME
2013
12Q1 12Q2 12Q3 12Q4 13Q1
13Q2
2014
13Q3
13Q4
14Q1
14Q2
2015
14Q3
14Q4
~
~
~
~
~
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
15Q1
15Q2
15Q3
15Q4
1
State-based HIX Implementation
~
~
~
~
2
State-based HIX Release 1 - Implementation
`
`
`
`
2
State-based HIX Release 2 - Implementation
2
State-based HIX Program Management, Integration and
`
`
`
2
State-based HIX Operational Startup (part of Establishment Grant)
`
`
`
1
State-based HIX Operation
~
~
~
~
2
State-based HIX Operation (post Establishment Grant)
`
`
`
`
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
35
DRAFT FOR DISCUSSION PURPOSES ONLY
Cost model estimates – Option 1 – State Based Exchange Cost includes design and implementation of all minimally ACA required systems and business capabilities Assumes a standalone organization separate from DOI Based on previous estimates developed for various states Timeline is extremely short for this level of effort (average of approx. 125 FTEs over the 2 year implementation timeline, peak above 200 FTEs) The potential to re-use proven solutions from other states is minimal at best – all states are still in development and will be right up to the Oct. 2013 deadline The risk of failing to meet the schedule is SIGNIFICANT
Initiative Name
External Resource Costs
Internal Resource Costs
Hardw are
Softw are
Other Costs
Total Im plem entation Cost
State-based HIX Implementation
$55,596,222
$6,708,055
$1,397,400
$7,407,482
$6,207,674
$77,316,833
State-based HIX Release 1 - Implementation
$24,705,294
$2,756,588
$1,286,200
$7,407,482
$51,250
$36,206,814
State-based HIX Release 2 - Implementation
$19,752,828
$2,186,795
$111,200
$0
$41,250
$22,092,074
$9,713,100
$663,132
$0
$0
$2,800,250
$13,176,482
$1,425,000
$1,101,540
$0
$0
$3,314,924
$5,841,464
State-based HIX Operation
$6,380,438
$1,551,636
$413,880
$1,503,062
$118,900
$9,967,916
State-based HIX Operation (post Establishment Grant)
$6,380,438
$1,551,636
$413,880
$1,503,062
$118,900
$9,967,916
State-based HIX Program Management, Integration and State-based HIX Operational Startup (part of Establishment Grant)
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
36
DRAFT FOR DISCUSSION PURPOSES ONLY
Cost model estimates – Option 2 – Federally Facilitated Exchange NOTES: The Federal Facilitated Exchange estimates is based on the integration required between State based Medicaid Eligibility Systems and The Federal Exchange, and the requirement to report on referrals from the Federal Exchange to State Medicaid. It also assumes that the State provides input into the federal exchange, particularly in of Eligibility, Plan Management, and Outreach to insurers, clients and employers. Estimates include state provision of requirements to the federal exchange, and integrating with federal and state systems as required. It is assumed that any operating cost impact will be absorbed by the state.
Initiative Name
External Resource Costs
Internal Resource Costs
Hardw are
Softw are
Other Costs
Total Im plem entation Cost
Federal facilitated HIX Implementation
$4,430,197
$490,398
$0
$0
$200,000
$5,120,595
Federal-facilitated HIX Release 1 - Implementation
$4,100,797
$443,634
$0
$0
$0
$4,544,431
$329,400
$46,764
$0
$0
$200,000
$576,164
Federal facilitated HIX Operation
$0
$0
$0
$0
$0
$0
Federal-facilitated HIX Operation
$0
$0
$0
$0
$0
$0
Federal-facilitated HIX Program Management, Integration and
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
37
DRAFT FOR DISCUSSION PURPOSES ONLY
Cost model estimates – Option 3 – Hybrid Exchange NOTES: The Hybrid Exchange is based on leveraging existing capabilities rather than setting up a new Exchange organization and systems. Estimates include state provision of requirements to the federal exchange, building selected functions, and integrating with federal and state systems as required.
Initiative Name Federal-State HIX Implementation
External Resource Costs
Internal Resource Costs
Hardw are
Softw are
Other Costs
Total Im plem entation Cost
$11,143,225
$1,994,375
$349,350
$655,478
$1,357,482
$15,499,909
$7,378,525
$898,905
$349,350
$655,478
$165,550
$9,447,807
$3,358,200
$4,330
$0
$0
$750,000
$4,112,530
$406,500
$1,091,140
$0
$0
$441,932
$1,939,572
Federal-State HIX Operation
$767,813
$623,851
$139,740
$131,096
$30,340
$1,692,839
Federal-State HIX Operation
$767,813
$623,851
$139,740
$131,096
$30,340
$1,692,839
Federal-State Hybrid HIX Release 1 - Implementation Federal-State Hybrid HIX Program Management, Integration and Federal-State Hybrid HIX Operational Startup (part of Establishment Grant)
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
38
DRAFT FOR DISCUSSION PURPOSES ONLY
Cost model estimates – Option 4 – Hybrid Exchange Transitioning to State Based Exchange This option assumes that the Hybrid Exchange will be built as defined in Option 3, followed by the implementation of a State Based Exchange within approximately 2-3 years following the Hybrid implementation.
It is assumed that the SBE implementation will take advantage of Federal Exchange Establishment funding. The cost of the Hybrid Exchange will be unchanged from Option 3 - $15.5M. The cost of implementing the SBE at a later date offers the opportunity to leverage and re-use early SBE implementations. The cost avoidance of this approach should be at least $10-15M – so the SBE developed following Hybrid Exchange Implementation should cost approx. $62.3-$67.3M. Estimated TOTAL COST of this option: $77.8-$82.8M
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
39
DRAFT FOR DISCUSSION PURPOSES ONLY
Comparison Of Options Scenario Option 1
Implications Year
Cost
Design & Impl
$77M
State Based Exchange
ANNUAL OPS
$10M
2
Design & Impl
$5.1M
ANNUAL OPS
$0
Design & Impl
$15.5M
Federally Facilitated Exchange 3 Hybrid Exchange 4 Interim Hybrid Exchange Transition to State Based
ANNUAL OPS
$1.7M
Design & Impl
$82.8M
ANNUAL OPS
$10M
BENEFITS ■ State controls the entire Exchange
■ Low cost, low risk
CONSTRAINTS ■ Very late start ■ Large and complex initiative ■ Little opportunity to leverage existing solutions ■ Expensive ■ Federally controlled ■ May be difficult to change later ■ Funding opportunity foregone
■ State influences the market and the consumer ■ Modest investment and operation
■ State influence is limited
■ Relatively low initial risk ■ State eventually controls the entire exchange ■ Can learn from other SBEs before going there
■ Longer duration ■ More change to manage over a longer time period
PMPM
$3
Unknown $0.52 (state share) Fed share unknown
% Success
VERY LOW
HIGH – dependent on Fed Gov
Medium
Medium $3
Per Member Cost based on estimate of 270,000 s © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
40
DRAFT FOR DISCUSSION PURPOSES ONLY
Questions and Answers
APPENDIX - Planning Method
Roap Planning and Estimating Process PORTFOLIO LEVEL (if planning and estimating multiple initiatives) Target Business Model
Develop Implementation Strategy
Recommended Design Option
Assemble Consolidated Portfolio Roap
Prioritize
Optimize
Identify Business Improvement Initiatives
Target Automation Architecture Current Automation Inventory
Establish General Estimating Assumptions
PER INITIATIVE Define Application Releases
Count Application Function Points
Identify Automation Architecture Work Packages
Identify Business Change & Enabling Work Packages
Schedule Projects
Group Work Packages Into Projects
Estimate Work Packages
Develop & Document Work Package Estimating Assumptions
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Adjust Estimates & Schedule
43
DRAFT FOR DISCUSSION PURPOSES ONLY
Estimating Application Component Complexity and Work Effort All Application Components are estimated in of functional complexity •Each Application Component is defined in of the business processes it s •Each process is mapped to the high level entities in the Conceptual Data Model
•This is the CRUD Matrix (each cell indicates whether the process Creates, Reads, Updates, or Deletes instances of each Entity) •The CRUD matrix is the key input to a function point count
The COSMIC-FFP method is the method used for function point counting (ISO/IEC standard 19761:2003) •The functional complexity of each process is calculated based on the CRUD, plus estimates of I/O, interface I/O, and rules complexity •The functional complexity of an Application Component is the sum of the function point counts of its processes
Work Effort is estimated based on Productivity assumptions •The number of work days per function point assumed to specify, design, build/configure, test and implement •COCOMO II is a key source we use for productivity assumptions (Common Cost Model) © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
44
DRAFT FOR DISCUSSION PURPOSES ONLY
The KERA Logical Component Architecture is derived from CMS guidance and complemented by HIE leading practices class HIX - Reference Logical Functional... class HIX - Reference Logical Functional Ov erv iew V02 - updated w ith NJ
Exchange Components Technical Components
Business Components Business Management Components
Core Business & Service Delivery Components Insurance Plan Management
IT Management Service Desk Management
Eligibility & Enrollment Operations
Financial ing & Reporting
Eligibility Assessment
Broker/Navigator Relationship Management
Comparison Shopping
Marketing & Outreach
Financial Management
Legend
Channel Interface Components
Suggested KERA Process Group
Unified Communications
ERA Process Group
Risk Management Technical Management
Asset Management & Tax Credit Processing
IT Operations Management
Human Resource Management
Application Management
Procurement Management
Exchange Portal
s Payable Processing
s Receivable Processing
Enrollment Processing
Customer Service & Management
Appeals Management
Business Components Information Management Records and Document Management
Business Intelligence
Reporting
Knowledge Management
Workflow and Rules Management
System Integration Management
Content Management
Business Process Management
Master Person Registry
Integration Management
Metadata Management
Business Rules Management
Financial Transaction Processing
Integration Content Processing
Integration Broker
Technical Components Privacy and Security Identity and Access Management Identity Management
Privilege Management
Authentication
Authorization
Intrusion Management Digital Signatures
Intrusion Detection
Intrusion Prevention
Audit
Confidentiality Management
Workflow and Rules Processing
Data Management
Encryption
Business Rules Engine
Data Indexing & Storage
Anonymization
Workflow Engine
Data Transformation
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Data Retrieval
45
DRAFT FOR DISCUSSION PURPOSES ONLY
Combination of the KERA component model and Idaho’s components yields a consolidated deployment model for a state-based exchange class Deployment Model V01
External Network
Perimeter Network
Internal Network
Public Zone (PZ)
Public Access Zone (PAZ)
Operating Zone (OZ)
Demilitarized Zone (DMZ) / Presentation Tier
Restricted Zone (RZ)
Data Tier
Application Tier Business Management Serv er Serv ice Deliv ery Serv er IT Management
External s
Portal Application Serv er
Service Desk Management
Technical Management
IT Operations Management
Application Management
Eligibility & Enrollment Operations Enrollment Processing
Eligibility Assessment
Broker/Navigator Relationship Management
Marketing & Outreach
Comparison Shopping
Customer Service & Management
Exchange Portal
Human Resource Management
Web Serv er
Unified Communications Serv er
Master Person Registry
Unified Communications
& Tax Credit Processing
Data Subjects:
Data Management Data Indexing & Storage
Data Retrieval Financial Transaction Processing Serv er
Data Transformation Serv er
Appeals Broker / Navigator HHS Plan Carrier HIX Customer Enrollment Price Quotation Financial
Data Management
Financial Transaction Processing
Financial Management
Appeals Management
Financial ing & Reporting
Procurement Management
HIX Database Serv er
Master Person Registry Serv er
Data Transformation Business Process Management Database Serv er
Risk Management
Asset Management
Data Management Data Indexing & Storage
Data Subj ects:
Workflow Business Rules
Internet Firew all 1
Firew all 2
Data Retrieval
Intergration Serv er Secure File Transfer Protocol (SFTP) Serv er
System Integration Management Integration Management
Integration Content Processing
Integration Broker
Firew all 3
Know ledge Management Database Serv er
External Systems Insurance Plan Management
Data Management
Data Subjects:
SSL VPN Serv er Know ledge Management Serv er
Information Management Serv er
Knowledge Management Metadata Management
Content Management
Intrusion Management Serv er
Information Management Records and Document Management
Business Intelligence
Intrusion Management Reporting
Intrusion Prevention
Audit
Confidentiality Mgmt Serv er Confidentiality Management
Data Indexing & Storage
Data Retrieval
Encryption
Content Metadata
Data Subjects: Master Aggregate
Intrusion Detection Anonymization
System Integration Management Database Serv er Workflow and Rules Processing / Management Serv er
class Deployment Model V01
Legend
Data Management
Identity and Access Management Serv er Workflow and Rules Management
Workflow and Rules Processing
Business Process Management
Business Rules Engine
Business Rules Management
Workflow Engine
Data Indexing & Storage
Identity and Access Management Identity Management
Privilege Management
Authentication
Authorization
Digital Signatures
Data Subjects: Event logs Audit history
Data Retrieval
KERA Component ERA Component Idaho Unique Component
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
46
DRAFT FOR DISCUSSION PURPOSES ONLY
Thank you
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms d with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are ed trademarks or trademarks of KPMG International.
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