Maine insurance plan CEO explains his co-op's success

Kevin Lewis is CEO of Maine Community Health Options, a not-for-profit, consumer-governed health insurer established through loans authorized by the Affordable Care Act. The Maine plan was the only co-op plan in the country that recorded a positive margin through the first nine months of 2014. Lewis previously served as CEO at the Maine Primary Care Association, representing community health centers, and as director of continuing care at the Maine Hospital Association. Modern Healthcare reporter Bob Herman recently spoke with Lewis about why his plan has been in the black while other co-op plans have lost money, building a provider network, and what will happen if the U.S. Supreme Court strikes down the ACA premium subsidies. This is an edited transcript.

Modern Healthcare: How has the 2015 open enrollment gone compared with 2014?

Kevin Lewis: It has been a lot smoother. We saw significant growth in our membership. We are up above 71,000 now, spread across our two states, Maine and New Hampshire.

MH: How did your plan do financially through all of 2014?

Lewis: We were in the black in all four quarters. We ended the year with a net surplus position, and we're looking at 2015 in the same manner.

MH: What has your plan done differently from other co-op plans?

Lewis: One thing we found to be crucial to our first year was being as close to the members as we could in terms of having the call center in-house. We found it essential to have that call center within our four walls so we could be close to the friction points where there were service issues and address them quickly.

We built our own proprietary provider network. That allows us better rates as well as direct relationships with the providers. And we didn't price with the ACA risk corridors or risk adjustment in mind. We priced according to what we thought was a sufficient amount of premium to cover claims and our administrative load.

MH: What is it like working with a consumer-governed board?

Lewis: We have roughly eight member directors and seven nonmember directors. It has been wonderful because of the caliber of the candidates who stepped forward to be directors. They have a passion for the mission, and they drive a discussion that yields the best results. So we as senior management are accountable in a very direct way to the membership, not only in terms of what we offer in our benefits and the results in terms of enrollment, but on a month-to-month, even day-to-day discussion with our board.

MH: Do you get a lot of feedback from them in terms of benefit design and provider networks? Has that been helpful?

Lewis: Absolutely, it has been helpful. It builds our strength and challenges us to ensure that we have all of the considerations in hand before making decisions.

MH: How were you able to bargain with hospitals and doctors over rates without having size or brand recognition?

Lewis: We didn't look at it as bargaining. We went out to the field to have the conversations with hospitals, community health centers and providers as to what the relationship from their viewpoint would look like in a successful payer-provider-patient triangle. And that was well-received. Providers better understood our mission and why we were coming to the market. Providers also value the additional choice we are offering the market.

MH: CoOportunity Health, the co-op plan that served patients in Iowa and Nebraska, was the first casualty of the ACA's co-op program. Is that a harbinger for co-op plans?

Lewis: We were all dismayed at what happened with CoOportunity. It's going to vary market to market. Every co-op has to work hard to hit that right trajectory of growth that doesn't surpass their solvency needs. That said, I think we're going to have some outstanding success stories of co-ops in many different states. Sure, there may be a failure or two. But looking at it as a new entry to a very competitive marketplace, I think the early successes of co-ops need to be trumpeted far more than the occasional failure.

MH: What are your organization's plans for 2016?

Lewis: We've been focused on the member experience and on member and provider engagement. We are streamlining the process and reducing the hassle factor for both providers and members. We want to make sure our members have the very best insight as to where they are on a day-to-day basis in terms of their cost-sharing, that they know how to maximize their plan benefit, and that they receive solid health information.

MH: How does your plan provide care management?

Lewis: We have grown our care management team to about three times the size of when we started. We have complex-care managers who work with our members, especially if they have transplant needs or oncology needs, to help them with navigation and offer information. Our blueprint has been to coordinate with providers around care management. We support patient-centered medical homes with per-patient, per-month payment; that payment is to help ensure that patient-centered medical homes flourish.

MH: What are the early indications of your actuaries in terms of setting premiums for 2016?

Lewis: We are seeing continued medical trend growth. A big driver is pharmacy costs. We also know that pharmacy is a powerful tool and can be a real game-changer for people with certain conditions. So it's a matter of how we best work with that tool and not have it financially harm people.

MH: Are there certain drugs that are causing your plan concern?

Lewis: Yes. The tremendous advances technologically that we have seen is that hepatitis C and cancer provide great clinical breakthroughs, but at significant expense. We just have to try and accommodate that the best we can.

MH: What will happen if the Supreme Court invalidates the premium subsidies in Maine, New Hampshire and other states using the federal exchange?

Lewis: I certainly hope that they don't throw the subsidies out. Nearly 100,000 people in Maine and New Hampshire have premium tax credits allowing them affordable coverage. I think the case is really strong against the plaintiffs. But in the event that the court holds for the plaintiffs, we will work diligently to ensure that Maine puts forward some sort of construct that allows the tax credits to continue to flow.

MH: You would push for a state-based exchange or some other type of transition plan?

Lewis: Right. We already have a mousetrap that works really well, as evidenced by the federal exchange's performance of late and the amount of tax credits that are flowing to people in Maine and New Hampshire. It would behoove the legislatures in both states to consider a state-based exchange that contracts with the federal exchange.