Health care law providing work for local companies

October 7, 2012

Local contractors are winning new work building health insurance exchanges and linking insurers into those networks as states move forward on the Obama administration’s Patient Protection and Affordable Care Act.

Reston-based Maximus, for instance, this summer started designing and developing Minnesota’s health insurance exchange. Under the $41 million, nearly two-year contract, the company is to create the technology for the exchange, meant to give Minnesota residents a way to shop for and enroll in health insurance plans.

Accenture, which has multiple local offices, won a $359 million contract to implement California’s health insurance exchange. About half of the funding will cover initial development and implementation, and the other half will go to operating costs over about three and a half years after implementation.

While some states are moving slowly, and in some cases opting to use a federal exchange initially, Bruce Caswell, president and general manager of health services at Maximus, said his company is expecting gradual increases in new opportunities.

“In the near-term, the addressable market at a state level is limited,” he said. But “that market will grow over time.”

A Reston-based company called hCentive, founded in 2009, is finding that building health insurance exchanges themselves is just the beginning.

Once hCentive develops and builds those, it then is going to insurance companies and helping them build the software they need to be able to connect with those exchanges.

With hundreds of insurance companies and a different health insurance exchange program in each state, the opportunities are nearly endless, said Sanjay Singh, hCentive’s chief executive and co-founder.

The company has already won work building health insurance exchanges for Colorado, New York and Massachusetts, he said.

Exchanges are gaining speed and attention. In the District, for instance, the D.C. Health Benefit Exchange Authority last week accepted a recommendation that would affect small businesses with 50 or fewer employees, requiring that they buy their health insurance plans through the city’s exchange.

States are taking different approaches to their health insurance exchanges — some are purchasing technology and services as a package while others are buying each piece separately — and are moving at different paces, creating a whole range of opportunities, said Amanda White, an analyst at Deltek, which researches the government contracting market.

There are also contracts for marketing, consumer outreach, manning call centers and quality assurance.

“The breadth of opportunities is so wide that it’s not just system integrators” pursuing this work, White said. “It just reaches a very wide group of vendors.”

While the deadline for states to get exchanges up and running is 2014, White said these consumer-focused marketing efforts should get off the ground in 2013 and 2014.

Caswell said the move to health insurance exchanges is also changing the ecosystem for health technology, setting the stage for further health modernization.

“Gone are the days when states can rely on a caseworker-based model for providing these services,” he said. “Exchanges are just the beginning.”

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