Covered California official concerned over provider network volatility, enrollee access

September 19, 2014 1 comment

As California’s health benefit exchange marketplace, Covered California, prepares for Plan Year 2015 enrollment in November, at least one of its board members is openly concerned whether plan enrollees will have predictable access to in-network health care providers.

At a Covered California board meeting this week, Board Member Kim Belshé observed there has been a “steady drumbeat” of media accounts of Plan Year 2014 enrollees having difficulty finding physician willing to accept Covered California plans. Belshé pointed to an aggravating factor of what she described as nearly real time changes to plan network provider rosters. California Executive Director Peter Lee noted some plan issuers are updating their network provider lists as frequently as weekly.

That introduces a degree of uncertainty that devalues the plans by robbing enrollees of the peace of mind that they will be able to see a network provider without running the risk of being turned away or having to pay more for care from a non-network provider. With the use of smaller networks in order to hold down premium rates, the likelihood that a provider isn’t in a given plan’s network increases.

It appears to come down to money and specifically provider reimbursement rates. Media accounts such as this one point to provider dissatisfaction over reimbursement rates for Covered California plans. This San Jose Mercury News item explains:

Many doctors are upset about the discounted reimbursement rates that insurers have imposed on them to keep premiums low on the Covered California exchange. The new rates — as much as 30 percent lower than those paid by nonexchange plans — took effect Jan. 1, when the new health care plans of hundreds of thousands of Californians kicked in.

The Patient Protection and Affordable Care Act and California law require health plan issuers that offer plans both on and off the California exchange to offer off exchange plans at the same price as exchange plans. But there is no requirement that provider networks be the same among the plans. California law effective June 16, 2014 allows plan issuers to factor provider networks into setting premium rates. Narrower networks can decrease rates but with the tradeoff of access to a wider pool of providers that affords enrollees a greater level of certainty a given provider may be in their plan network.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

GAO report points to low Medicaid reimbursements as impetus for “Arkansas plan”

September 17, 2014 Leave a comment

A recent critical assessment of Arkansas’s use of federal Medicaid dollars to subsidize the purchase of commercial individual health plans by low income people through the state’s health benefit exchange indicates a lack of health care providers willing to accept standard Medicaid reimbursement played a key role in the move. The repurposing of the Medicaid funding was authorized under a 3-year-long demonstration project waiver issued in the U.S. Department of Health and Human Services (HHS) in 2013.

The U.S. Government Accountability Office (GAO) issued a report earlier this month criticizing the waiver as contrary to HHS’s policy of requiring such waivers not incur costs beyond existing state Medicaid program expenditures. The report concluded that $4 billion HHS approved for the demonstration project was approximately $778 million more than the state would have spent for adult beneficiaries under its then-existent Medicaid program. HHS disagrees with the report’s conclusion, contending GAO too narrowly analyzed HHS’s budget neutrality policy governing Medicaid demonstration programs and Arkansas’s Medicaid cost data and failed to take into account the effect of Medicaid program expansions.

The stated policy intent of the demonstration is to ensure access to care and continuity of coverage since individuals could stay enrolled in the same health plan regardless of whether their coverage is financed through Medicaid or federal subsidies. The GAO report noted that according to Arkansas’s waiver application, the state’s network of Medicaid providers was at capacity. “By purchasing [exchange qualified health plan] coverage for newly eligible [Medicaid] beneficiaries, the state suggested it could improve access to care because beneficiaries would have access to expanded provider networks” through commercial plans sold on the exchange.

The GAO report takes issue with “questionable assumptions about provider payment rates,” noting the demonstration program projected the cost of expanding Medicaid without the demonstration assumed Arkansas would have had to pay its Medicaid providers rates comparable to private insurance payment rates—significantly higher rates than the rates the state was paying its [Medicaid] fee for service (FFS) providers—to ensure access for newly eligible beneficiaries.

For example, the report noted, the state assumed that it would have to pay 67 percent above its Medicaid reimbursement rate for primary care services and 10 percent above Medicaid reimbursement rates for higher-cost services such as inpatient and long-term care. “HHS approving officials told us that they thought the state’s underlying concern about the insufficient capacity of the state’s Medicaid provider network was valid given a projected 25 percent increase in the number of individuals covered under the state’s Medicaid program,” the GAO report states.

HHS has approved similar demonstration waivers for Iowa and Pennsylvania, allowing those who would otherwise be eligible for Medicaid coverage to purchase coverage through those state’s health benefit exchanges. Interest has also been shown by New Hampshire and active negotiations underway between HHS and Utah.

“Arkansas’s demonstration may prove an important test of whether using Medicaid funds to finance coverage offered through exchanges will improve access to care and continuity of coverage for the adult population that the demonstration aims to cover,” the GAO report concludes. “However, the increasing use of demonstrations has shifted a significant portion of federal Medicaid funds into financing care that is not subject to all of the federal Medicaid requirements. While HHS policy requires that demonstrations be budget-neutral and therefore not increase the costs to the federal government, we have had long-standing concerns about the Department’s ability to ensure budget neutrality given HHS’s flexible approach towards approving spending for new demonstrations.”

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

New Anthem Blue Cross plan takes on Kaiser – LA Times

September 17, 2014 Leave a comment

Overall, Vivity will comprise 6,000 doctors and 14 hospitals across the seven health systems.But Anthem wants to work with these medical centers to keep as many patients as possible from ever setting foot inside the hospital.

“Under the current model, hospitals want to keep occupancy rates up,” said Pam Kehaly, Anthem’s west region president and a key architect of this deal. “This is in complete opposition to that. For this joint venture to succeed, we have to keep occupancy rates down.”

Susan Ridgely, a senior policy analyst at the Santa Monica think tank Rand Corp., said these hospitals are probably betting that they can attract enough new patients and referrals through Vivity to offset the gradual decline in inpatient admissions.via New Anthem Blue Cross plan takes on Kaiser – LA Times.

Anthem Blue Cross is adopting an accountable care organization (ACO)-like strategy in Southern California where it and hospitals jointly benefit from reducing costly patient admissions. It reverses the current economic model in which health plan issuers and hospitals have conflicting interests to one based on the principle that enhanced access to lower cost care is better for both payers and providers than costlier hospital admissions. An innovative development worth watching.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Pre-diabetes, diabetes rates fuel national health crisis

September 15, 2014 Leave a comment

Americans are getting fatter, and older. These converging trends are putting the USA on the path to an alarming health crisis: Nearly half of adults have either pre-diabetes or diabetes, raising their risk of heart attacks, blindness, amputations and cancer.

Federal health statistics show that 12.3% of Americans 20 and older have diabetes, either diagnosed or undiagnosed. Another 37% have pre-diabetes, a condition marked by higher-than-normal blood sugar. That’s up from 27% a decade ago. An analysis of 16 studies involving almost 900,000 people worldwide, published in the current issue of the journal Diabetologia, shows pre-diabetes not only sets the stage for diabetes but also increases the risk of cancer by 15%.

“It’s bad everywhere,” says Philip Kern, director of the Barnstable Brown Diabetes and Obesity Center at the University of Kentucky. “You almost have the perfect storm of an aging population and a population growing more obese, plus fewer reasons to move and be active, and fast food becoming more prevalent.”

via Pre-diabetes, diabetes rates fuel national health crisis.

The health insurance crisis is a population health status crisis that is at its base an individual lifestyle crisis. That lifestyle crisis is ultimately a cultural crisis since cultural values influence lifestyle choices. In the 1970s and 1980s, exercise and fitness were cool. Hopefully they will come back in style — and soon.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

N.Y. limits average health insurance increases to 5.7%

September 12, 2014 1 comment

ALBANY – The state on Thursday approved an average 5.7 percent rate increase for health insurers in 2015, spurning their request for a 13 percent hike.

Insurers in July cited growing costs in their rate requests. But the state Department of Financial Services set the rate and said it would be an average of 5.7 percent for individual plans, saying it will save customers about $1 billion next year.

Overall, the agency contended that rates will remain 50 percent lower than they were prior to state’s health care exchange that started Jan. 1. Nearly 1 million New Yorkers enrolled in the health exchange. The next enrollment period starts Nov. 15 for coverage starting on Jan. 1.

For small-group insurance, insurers wanted a 13.9 percent increase. The state reduced it to 6.7 percent.

via N.Y. limits average health insurance increases to 5.7%.

This development could have implications for California which like New York operates a state-based health benefit exchange that actively negotiates premium rates with health plan issuers.

A measure on California’s General Election ballot in November, Prop. 45, would bring the Golden State in line with New York and a majority of states that require health plan issuers obtain prior regulatory approval before using rates.

Prop. 45 has raised concerns among opponents as well as the state’s health benefit exchange, Covered California, of potential disruption of the individual and small group health insurance market if plan issuers decide they can’t live with approved premium rates lower than those filed. That could possibly lead to plans being withdrawn from regions or all of the state as threatened by the New York state Health Plan Association in this story.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Controlling Health Care Costs Through Limited Network Insurance Plans: Evidence from Massachusetts State Employees

September 10, 2014 Leave a comment
AspectInsurance

We find that distance traveled falls for primary care and rises for tertiary care, although there is no evidence of a decrease in the quality of hospitals used by patients. The basic results hold even for the sickest patients, suggesting that limited network plans are saving money by directing care towards primary care and away from downstream spending. We find such savings only for those whose primary care physicians are included in limited network plans, however, suggesting that networks that are particularly restrictive on primary care access may fare less well than those that impose only stronger downstream restrictions.

via Controlling Health Care Costs Through Limited Network Insurance Plans: Evidence from Massachusetts State Employees.

 

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Wellness isn’t at the office

September 4, 2014 Leave a comment

We spend the majority of our waking hours at work. The office environment has a great deal of influence over the shape and structure of our lives. While the doctor’s visit is where many health conversations start, it is rarely where they continue to live. Workplaces have the opportunity to keep this conversation going. As Catherine Baase, Global Director of Health Services for The Dow Chemical Company, states, “The workplace, through its established culture, can have greater long-term impact than the visit with your doctor, the reach of government and even the sphere of your family. It is the secret sauce to driving outcomes — and an essential factor in achieving population health.”

Influence also stems from an organization’s ability to create an ecosystem of health around an individual. While a doctor’s advice often fails to stick because it gets drowned out in our hectic lifestyle, workplaces can support an individual’s adherence to health everyday by surrounding an employee with a physical and social environment that makes health the simple and meaningful choice. At USAA, it’s hard to ignore the physical representation of health. The company has made it so convenient it’s become part of the fabric of the organization with amenities, such as bike stations, BMI testing rooms, indoor and outdoor walking paths, stairway signs estimating calories burned for use, energy rooms, healthy food and a massive gym. Culturally at USAA, health has been woven in, with departments competing to collect healthy points. The reward—a sense of group pride—is a compelling force to action and holds people accountable. When we bump up against these attitudes and resources day in and day out at the workplace, they influence our perspectives on health.

via Reach and influence: Why corporate wellness programs really do work.

I respectfully disagree with the notion that workplaces are the magic bullet for encouraging health promoting behaviors to ward off preventable, lifestyle-related chronic conditions that cost organizations billions in health care costs and lost productivity. Yes, knowledge workers do spend the majority of their waking hours at work. But the daily — and needless — commute of 40 to 120 minutes to sit in an office for 8 hours is one of the worst things we can do for our collective health.

The more sensible — and less costly for both organizations and their members — approach is to leverage information and communications technology to shift away from the overarching centralized commuter office culture. Treat staff as adults and let them manage where and when they get their work done. That way, they’ll have more freedom and freed up time from ditching the daily commute to hit the (real, not office mini) gym, walk, run, swim, and cycle on their own schedules. If organizations want their members to adopt health promoting behaviors, they need to give them maximum freedom and support to make that choice. And they’ll likely benefit from reduced real estate and health care costs, lower turnover and higher staff attraction and retention.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Lingering recession fallout: Medicaid grows to cover nearly one third of Californians

Enrollment in California’s Medicaid program, Medi-Cal, is projected to grow in the new fiscal year that began July 1 to cover about 30 percent of the state’s population, with total enrollment expected to rise from 7.9 million before implementation of the Patient Protection and Affordable Care Act to 11.5 million in fiscal 2014-15, according to a summary of the budget.

The growing importance of Medi-Cal was highlighted in the release today of results of a California Field Poll of registered voters showing respondents assigning growing importance to Medi-Cal. Twenty-nine percent of voters surveyed rated the program as “very important” in a 2011 Field Poll; that number rose to 40 percent this year. “This is a safety net program (for the poor) that has now reached the masses,” noted Mark DiCamillo, senior vice president of the Field Research Corporation, calling the increase “very significant.”

The high percentage of Californians covered by Medicaid appears to coincide with the 2007-09 recession. As the downturn began to bite, data compiled by Kaiser Family Foundation show California having about the same percentage of its population in Medi-Cal in 2010 – 31 percent that year – and among the highest proportion of its population in Medicaid compared to other states. Only Maine and Vermont equaled California’s 31 percent in 2010 and those three states were exceeded only by the District of Columbia at 35 percent, according to the Kaiser Family Foundation. (Comparative year to year data are not available)

The growth in Medi-Cal spending all but wiped out an unanticipated surge in state tax revenues, the Ventura Star quoted Gov. Jerry Brown as saying. Consequently, Brown’s revised $107.8 billion general fund budget proposal contains little new spending beyond covering the additional costs of providing health care to 307,000 more low-income residents than anticipated when the 2014-15 budget was released in January, the newspaper reported. Another account appearing in The Sacramento Bee quoted Brown as saying California faces $1.2 billion in unanticipated costs in expanded Medi-Cal enrollment in the new fiscal year.

As Medi-Cal grew to cover 1 in 3 Californians in 2010 as tax revenues declined in the recession, the administration of then-Gov. Arnold Schwarzenegger bluntly declared the state could no longer afford to fund the program as it sought cost relief though program reductions and federal rule waivers. The heavy fiscal burden of program clearly continues to vex the current Brown administration. “As we are paying for this that will be at the expense of other government priorities,” said Health and Human Service Secretary Diana Dooley at today’s Sacramento briefing on the Field Poll results.

A final takeaway worth pondering: With more people being covered by Medicaid, might California and eventually the United States as a whole be moving toward the German “Kaiser system” where the government provides a safety net of basic health coverage for all?

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

California’s continuing Medicaid woes

Five years ago as California stared down a severe budget gap as the economy cratered, the state drew up plans to cut $1.2 billion from its Medicaid program, Medi-Cal, through program reductions and federal rule waivers.

At the time, then-California Health & Human Services Agency Secretary Kim Belshé warned that even with a $10 billion infusion of supplemental federal cost share funding provided by the American Recovery and Reinvestment Act of 2009, “California cannot afford the Medicaid program as currently structured and governed by federal rules and requirements.”

Now with the budget crisis in the past amid an uneven economic recovery, the Golden State faces renewed concerns that it can fund a sustainable Medicaid program given its acceptance of expanded family status and income eligibility guidelines under the Patient Protection and Affordable Care Act. As a result of the expansion, a staggering 3 in 10 California residents are expected to obtain health coverage though the program. In addition to budgetary concerns, there is also the practical matter of whether Medi-Cal beneficiaries will have adequate access to providers given the state’s low reimbursement rates.

Kaiser Health News provides an analysis of the situation here.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

Health plan issuers concerned individual mandate being weakened

The Patient Protection and Affordable Care Act aimed to remedy market failure in the individual health insurance market segment by effectively forcing sellers and buyers to get together. On the sell side by requiring health insurers to accept all applicants for coverage regardless of their medical condition or history and providing premium subsidies to make coverage more affordable. And on the buy side by mandating all U.S. citizens obtain individual coverage if they are not covered by a private or public health plan under pain of a tax penalty.

However, individual health plan issuers worry that the mandate is being weakened by a growing list of exemptions, according to this Wall Street Journal item. In particular, they are concerned that too many younger individuals who tend to use fewer medical services and cost less to cover will be exempted from the mandate, undermining the actuarial viability of the market.

“To make these new reforms work, there needs to be broad participation in the system,” Karen Ignagni, president and CEO of America’s Health Insurance Plans, told the newspaper.

 


The ACA health insurance market reforms are at hand. Need help understanding and preparing for the new regulatory landscape and the health benefit exchange marketplace -- and explaining them to your key stakeholders?  Pilot Healthcare Strategies can help with expert analysis and clear communications. For a free initial consultation, email me at fpilot@pilothealthstrategies.com or call 530-295-1473. 

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