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Leavitt Partners, the consulting firm started by former Utah Gov. Mike Leavitt, has a remedy for states suffering heartburn over health exchanges.

But the fix — known as "Exchange in a Box" — has yet to gain much traction in Leavitt's home state of Utah.

Exchange in a Box is a technology plug-in that Leavitt Partners is pitching to states that want to run their own web-based insurance markets, but who can't meet the Affordable Care Act's October 2013 launch deadline, or who chafe at all the strings attached to federal start-up funding.

It would handle all the "back-end" functions, including customer service and the processing of insurance applications and, in some cases, insurance payments, explained Dan Schuyler, now a director at Leavitt Partners. In his previous job with state government, he was one of the architects of Utah's exchange, Avenue H.

The benefit to states is that it allows them to retain regulatory control over their exchanges without having to handle day-to-day operations, Schuyler told members of Utah's Legislative Health Reform Task Force on Monday.

Big-name software and health companies have committed to develop the technology: Microsoft, Infosys, bswift, Connecture, Cognosante and EBIX. Leavitt Partners is being paid as a consultant, or "convener," but has no financial investment in the product, said Schuyler.

"We're just marketing it, advocating for it as an alternative approach," he said.

The idea is designed for states that are considering a partnership exchange — where they take on some functions and cede others to the federal government — because it allows them to share costs, said Schuyler. "The more states that participate, the lower costs will be."

At least seven states have expressed interest, including New Mexico, Idaho and Wyoming, said Schuyler.

But in Utah, it's a harder sell.

The state has already invested cash and political capital building Avenue H, a "shop" exchange for employees of small businesses.

In recent years, Utah has also spent tens-of-millions computerizing the handling of Medicaid applications. The Exchange in a Box would have to interface with that system.

Utah Gov. Gary Herbert has already committed to preserving Avenue H and opening it to individuals and larger employers. If his proposal passes federal muster, the state will likely delegate some functions to a vendor.

But Leavitt Partners has "had no conversations" with Herbert's office, Schuyler said. And lawmakers, who control the state's purse strings, have not weighed in on Herbert's design.

Chairman of the Legislative Health Reform Task Force Rep. Jim Dunnigan, R-Taylorsville, was open to Utah running its own exchange, but now doubts it will work.

"The feds aren't giving us the flexibility to be an incubator, an innovator," he said. "Basically the state exchange is a federal exchange, only we do more of the work and have more liability." —

About Leavitt Partners

O Founded in 2009, Leavitt Partners is a self-described health care intelligence business. After serving for a decade as Utah's governor, the firm's chairman, Mike Leavitt, served as head of the U.S. Environmental Protection Agency and later, Health and Human Services secretary under President George W. Bush.