Tuesday, April 29, 2014

Quote of the Day

“What [Gilead Sciences] has done with [the hepatitis C drug Sovaldi] will break the country. It will make pharmacy benefits no longer sustainable. Companies just aren’t going to be able to handle paying for this drug.” — Steve Miller, chief medical officer for Express Scripts Holding Co., in an interview with Bloomberg.

Today's Datapoint

6% … is the annual premium increase for “silver” plans on public exchanges that are projected from 2016 through 2024 in a new report from the Congressional Budget Office and Joint Committee on taxation.

Monday, April 28, 2014

Quote of the Day

CMS’s final 2015 rate notice and Medicare Advantage/Part D Call Letter issued April 7 “was a holy cow….I don’t think we saw all this coming. It seemed like they changed everything.” — Pat Dunks, a principal and consulting actuary in the Milwaukee-area office of Milliman, told AIS’s Medicare Advantage News.

Questions employers should answer before going the private health insurance exchange route

1. What are you trying to do with your health care benefits; what’s your overall talent management strategy? 2. What are you looking for in an exchange; what kind of services are you trying to buy? 3. What are the criteria that are important to you when you evaluate exchanges? 4. How is the exchange structured: is it a single carrier or multicarrier exchange? 5. Does the exchange determine what the benefits are, or is there flexibility for the plan sponsor? Source: Employee Benefit News

Top Customer Experience Rankings Among Health Plans

1. Kaiser Permanente (68%) 2. Humana (63%) 3. Medicare (62%) 4. TriCare (62%) 5. United Healthcare (59%) 6. Blue Shield of California (58%) 7. Aetna (57%) 8. Health Net (55%) 9. CIGNA (54%) 10. Anthem (BCBS) (53%) 11. CareFirst (BCBS) (48%) 12. Medicaid (45%) 13. Highmark (BCBS) (44%) 14. Empire (BCBS) (42%) 15. Coventry Health Care (41%) Source: Temkin Group

The Small Business Health Options Program (SHOP) Marketplace and The Small Business Health Care Tax Credit

1. Employers with fewer than 25 full-time equivalent employees may be eligible for the Tax Credit, worth up to 50% of employer premiums contributions, if employees make average of $50,000 a year or less. 2. The tax credit will be available to eligible employers for two consecutive taxable years. 3. The tax credit may be available to eligible tax-exempt employers who could receive up to 35% of employer premium contributions, and can access the credit as a refund. 4. Generally, the Small Business Health Care Tax Credit is available for eligible employers purchasing SHOP health plans. 5. To enroll in a SHOP plan in most states, you’ll use an agent, broker, or insurance company. You’ll also need to complete a SHOP eligibility application. 6. Even if you’re a small employer who does not qualify for a small business tax credit, you may still purchase coverage through SHOP. Source: Healthcare.gov

Friday, April 25, 2014

Is It Up, Up and Away for 2015 Premiums? CBO and Actuaries Disagree

By Steve Davis - April 17, 2014 Will premiums for exchange-based health coverage skyrocket this fall? The Congressional Budget Office doesn’t think so. In a report released April 14, CBO and the Joint Committee on Taxation predicted lower costs than initially projected due largely to the way health insurers have restructured the plans (e.g., using narrow networks and lower provider reimbursement rates). But based on my interviews with health plan actuaries, it seems to me that up is about the only direction health coverage prices can go. During WellPoint, Inc.’s Investor Day March 21, executives conceded that exchange premiums in 2015 will likely need to go up by “double digit plus” levels. WellPoint participates on 14 public exchanges and probably is the single-largest seller of qualified health plans on exchanges. Health plan actuaries agree that it’s too early to know how much rates will rise for 2014, and health plans are still a little in the dark about what their risk will look like. But Chris Carlson, a principal and consulting actuary at Oliver Wyman, says the underlying risk, in a best-case scenario, will increase rates 6% to 8%. Lower-than-expected enrollment could add another 1% to 2%. The insurance tax, which became effective this year, may add an additional 0.5% to 1.0% to premiums for 2015 as the tax increases from $8.0 billion to $11.3 billion. The overall impact the insurance tax will have on 2015 rates, compared to what’s built into 2014 rates, is about 0.5%. The scheduled reduction in federal transitional reinsurance payments could require rates to increase in the individual market even without any of the other rate-influencing forces, says Hans Leida, Ph.D., a consulting actuary at Milliman. And preliminary data from pharmacy benefit managers Prime Therapeutics and Express Scripts indicate those new members also tend to use more costly specialty drugs than do people with non-exchange based commercial coverage. Actuaries are conservative by nature, so even the general uncertainty surrounding exchanges could impact rates. The more uncertain the environment, the more margin actuaries want to build into the rates. What do you think? Will carriers be able to keep rates low for 2015? See the CBO report at www.cbo.gov/publication/45231. http://aishealth.com/blog/health-reform/it-and-away-2015-premiums-cbo-and-actuaries-disagree?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=38613482

Quote of the Day

“Many, many touches [were] needed to get people across the finish line.” — Peter Lee, executive director of Covered California, on the biggest lesson managers of the state’s public exchange learned during its first ACA open enrollment.

Today's Datapoint

20% to 30% … of the qualified health plans sold during the recently concluded enrollment period took place outside the exchanges, according to preliminary enrollment results provided to AIS by health plan operators.

Thursday, April 24, 2014

Quote of the Day

Medicare-Medicaid dual eligibles “utterly defy any kind of homogeneity. A dual is an 83-year-old with four chronic conditions and taking 11 different medications. A dual is a 49-year-old with advanced Down Syndrome living in a group home and working three days a week but has a host of health care issues. And a dual is a 36-year-old end-stage AIDS patient who got Medicare through SSI. And you have to be able to manage all three of those types and a whole bunch of others that you never even imagined to master this population.” — John Gorman, executive chairman of Gorman Health Group, LLC, told AIS’s Health Plan Week.

Areas Rural Hospitals are Delivering Value

• Rural hospitals charge 63% less than their urban counterparts. • Spending per beneficiary for rural hospitals could save $6.8 billion if adopted by all. • Quality, patient safety, outcomes and satisfaction are equal, while price and efficiency in the emergency department are better. • Patients' total time in the rural emergency department is 56 minutes faster than in urban facilities. Fifty percent of those ED visits occurred during normal business hours and are for low acuity cases. Source: iVantage Health Analytics

According to a recent study:

• 80.4% of Medicare beneficiaries who were assigned to an Accountable Care Organization (ACO) in 2010, were assigned to the same ACO in 2011, and 19.6% were not • Among ACO-assigned beneficiaries, 8.7% of office visits with primary care physicians were provided outside of the assigned ACO • Among ACO-assigned beneficiaries, 66.7% of office visits with specialists were provided outside of the assigned ACO • 37.9% of Medicare spending on outpatient care billed by ACO physicians was devoted to ACO-assigned beneficiaries, and 62.1% was not Source: "Outpatient Care Patterns and Organizational Accountability in Medicare," JAMA Internal Medicine, abstract only, April 21, 2014, https://archinte.jamanetwork.com/article.aspx?articleid=186103

Affordable Care Act Enrollment Numbers

• 8 million people signed up for private insurance in the Health Insurance Marketplace. For states that have Federally-Facilitated Marketplaces, 35 percent of those who signed up are under 35 years old and 28 percent are between 18 and 34 years old, virtually the same youth percentage that signed up in Massachusetts in their first year of health reform. • 3 million young adults gained coverage by being able to stay on their parents plan. • 3 million more people were enrolled in Medicaid and CHIP as of February, compared to before the Marketplaces opened. • 5 million people are enrolled in plans that meet ACA standards outside the Marketplace, according to a CBO estimate. • 5.7 million people will be uninsured in 2016 because 24 States have not expanded Medicaid. Source: The White House

According to a recent study,

the frequency of diagnostic errors in the U.S. adult population is 5.08%, or roughly 12 million persons annually. Source: "The frequency of diagnostic errors in outpatient care: estimations from three large observational studies involving US adult populations," BMJ Quality and Safety, abstract only, April 17, 2014, http://qualitysafety.bmj.com/content/early/2014/04/04/bmjqs-2013-002627.abstract?sid=90fdcc67-8504-42f4-8eb7-31499a34bf77

Monday, April 21, 2014

Overall provider satisfaction with Health Information Exchange (HIE) solutions

has dropped an average of 8% since last year, according to a recent report. Source: "HIE solutions see drop in provider satisfaction," KLAS Press Release, March 5, 2014, http://www.klasresearch.com/News/PressRoom/2014/HIE_2014

Distribution of Payer Rejection of Retail Prescriptions by Reasons

-Quantity Limits - 5.3 % -Prior Authorization Required - 11.7 % -Not Covered - 12.0 % -Step Edits - 20.4 % -Re fill Too Soon - 30.8 % -All Other - 19.9 % Source: IMS Institute for Healthcare Informatics

Quote of the Day

“So much of this [health law] stuff is counterintuitive. Most of my clients are smart, yet many of them will ask me the same question more than once because this stuff is so weird it doesn’t stay in your head.” — Attorney David Glaser, who is with Fredrikson & Byron in Minneapolis, told AIS’s Report on Medicare Compliance.

Today's Datapoint

$400 billion … in organic premium growth is the impact the dual-eligible population could have by the end of the decade, according to John Gorman, executive chairman of Gorman Health Group, LLC, who characterizes duals as “a massive new market the likes of which we haven’t seen in our lifetime.”

Thursday, April 17, 2014

Today's Datapoint

More than $10 billion in annual federal premium subsidies will go to public exchange enrollees, an average of about $2,890 per person, according to a new report from the Kaiser Family Foundation.

Percentage Increase in Specialist Physician Compensation by Year

2010 - 3.5% 2011 - 2.4% 2012 - 2.8% 2013 - 1.6% Source: Managed Care, january 2014 Data Souce: 2013 Medical Group Compensation and Financial Survey, American Medical Group Association

In 2011, there were approximately 3.3 million hospital readmissions in the United States

contributing $4.3 billion in total hospital costs, broken down as follows: • Medicare had 55.9% of total readmissions and 58.2% of associated costs for readmissions • Medicaid had 20.6% of total readmissions and 18.4% of associated costs • Private insurance had 18.6% of total readmissions and 19.6% of associated costs • The uninsured had only 4.9% of total readmissions and 3.7% of associated costs Source: "Conditions With the Largest Number of Adult Hospital Readmissions by Payer, 2011," Agency for Healthcare Research and Quality, Statistical Brief #172, April 2014, http://www.hcup-us.ahrq.gov/reports/statbriefs/sb172-Conditions-Readmissions-Payer.jsp

Monday, April 14, 2014

Percentage Under 65 Who Were in Families Having Problems Paying Medical Bills

in The Past 12 Months, by 6-Month Intervals January - June 2011: 21.7% July - December 2011: 20.8% January - June 2012: 20.3% July - December 2012: 20.5% January - June 2013: 19.8% Source: CDC/NCHS, National Health Interview Survey

The uninsured rate for U.S. adults

fell from 17.1% in the fourth quarter of 2013 to 15.6% in the first quarter of 2014, the lowest level since late 2008. Source: "In U.S., Uninsured Rate Lowest Since 2008," Gallup News Release, April 7, 2014, http://www.gallup.com/poll/168248/uninsured-rate-lowest-2008.aspx

Quote of the Day

“Rural areas need to understand that more aggressive provider groups will take over many of our patient bases if we aren’t engaged. There are so many large corporate models that are cruising across rural areas, snapping up practices — it’s frightening. And that might not be a problem if the snappers were good providers, but everything I have seen looks like they have profit motive first, patient care second or third. Better to be proactive and keep the quality care available for rural patients.” — Christine Baumgardner, executive director of Alcona Citizens for Health, Inc., of Lincoln, Mich., told AIS’s ACO Business News.

Today's Datapoint

More than 70% of covered brand-name mental health and oncology drugs require utilization management in exchange plans, according to a new analysis by Avalere Health, LLC.

Friday, April 11, 2014

Michigan Awaits Delayed OK for CMS Duals Demo; Ariz. Goes Slowly in Starting Its Own

Reprinted from MEDICARE ADVANTAGE NEWS, biweekly news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in MA and Medicaid managed care. By James Gutman, Managing Editor March 27, 2014 Volume 20 Issue 6 An indicator of the future direction of programs for Medicare-Medicaid dual eligibles could come soon when CMS will decide whether to approve a Michigan proposal that would keep behavioral health care separate from physical health care despite the goal of integrated care (MAN 11/21/13, p. 6). When Michigan selected eight health plans for its duals initiative last November, the state said it was in the process of “finalizing” its Memorandum of Understanding (MOU) with CMS. But more than four months later, there has been no MOU, and industry insiders tell MAN the major obstacle has been the separation of behavioral health. The delay in working out issues related to this separation already has been a factor in pushing back the projected start date for passive enrollment of duals in two large Michigan counties (Wayne and Macomb) from July 1 to Oct. 1. And now even the Oct. 1 start date “is at very significant risk,” one plan executive says. The executive points out that to make the October date, CMS site visits would need to occur by summer. In the meantime, the situation is further complicated by a new Michigan Medicaid redesign program that aims to shift some costs to beneficiaries, with the aid of health savings accounts. This program begins April 1, but the cost-sharing aspects would not kick in until Oct. 1. Michigan Department of Community Health spokesperson Angela Minicuci says only that MDCH hopes to have the duals MOU finalized “soon.” It has held a few forums with stakeholders since the plan selections were unveiled last November, Minicuci tells MAN, but otherwise there is nothing new to report. CMS itself is adhering to a policy of not commenting about the time frame for MOUs until they actually are finalized, but there are indications a decision on Michigan could be imminent. The major complication in Michigan’s proposal is that it wants to preserve a longstanding system of separate, albeit responsive, Prepaid Inpatient Health Plans (PIHPs) to cover the behavioral health needs of the state’s more than 200,000 duals. The Integrated Care Organizations (ICOs) that the state selected last November would be responsible for “all physical health, long-term supports and services, and pharmacy services,” MDCH said in its Request for Proposals. They would have to coordinate with the PIHPs on behavioral health, which accounts for about 10% of Michigan’s duals spending. This split responsibility is counter to CMS’s oft-expressed desire for its huge duals demonstration program to have organizations fully accountable for all coordinated care of duals. But the agency’s duals office has found a way of dealing with a related issue in the Massachusetts demo it approved by excluding duals with intellectual development disabilities from the demo. CMS also agreed to a limited behavioral-health carve-out in California’s duals demo. Texas, one of the two states with capitated duals demo proposals that haven’t gotten a decision from CMS yet (Rhode Island is the other), also is looking to carve out some services, although there the carve-out relates to nursing facilities. So the decision on Michigan might give some insight into how Texas’ proposal might be resolved. The difference in Michigan’s proposal from CMS’s preferences “has been a major sticking point since the beginning,” says Rich Bringewatt, co-chair of the SNP Alliance trade group. Michigan’s assumption, he tells MAN, is that ICOs and PIHPs “would work together but not in a way that some might consider as being ‘integrated.’” While the state has not informed plans about the reasons for the delay in the MOU, “we can only infer that it is related to working through the details of the Care Bridge model,” Bringewatt says. This is the state’s name for a care model that MDCH says “requires the coordination of services and supports between the two entities and involved providers.” Bringewatt does note that CMS signed off on the concept of the Care Bridge model before the state started procuring plans for the duals demo, but adds that working through the details of how the model actually will function is more complex. “We’re still looking forward to starting Oct. 1,” Tom Standring, vice president, Medicare at Molina Healthcare, Inc., tells MAN. Molina is one of the plans Michigan selected for multiple regions, and it stands to serve the two most populous counties, Wayne and Macomb. Standring points out that for the Oct. 1 start to be feasible, the state and CMS will need to release their readiness-review tools right after the MOU is approved. Another unresolved matter, he acknowledges, is payment rates, adding that Molina hasn’t seen final or even draft rates yet. State Duals Programs Also Face Slow Going With the continued slow rollout of the CMS-backed demo, some states are pushing their own initiatives more, but they also face issues delaying the cost savings and full integration that they seek. Arizona, for instance, which withdrew its CMS duals demo application in April 2013 to focus on an approach aimed at a permanent program centered on Medicare Advantage Special Needs Plans for duals (D-SNPs), is still in the formulation stage for its new duals initiatives. The state does have 53,000 duals in D-SNPs (MAN 10/24/13, p. 1), and “we believe the D-SNP model is the right path for us,” Monica Higuera Coury, assistant director in the Office of Intergovernmental Relations in the Arizona Health Care Cost Containment System (AHCCCS), tells MAN. Specific areas it is focusing on, adds Kijuana Wright, who leads duals integration efforts for AHCCCS, include behavioral health integration for “acute care plans” serving duals starting in 2015. She also notes that Arizona told plans they needed to have contracts with AHCCCS to furnish Medicaid services in order to continue as a D-SNP in 2014 and beyond. Wright tells MAN that AHCCCS’s specific goals in “strategic duals alignment” include a “single accountable entity” to improve care coordination, a single entity capable of better aligning financial incentives and “enhanced appropriate community placement for members at risk of institutionalization.” One of the reasons Arizona feels urgency to take broad action on duals is that about 41% of the state’s full duals now are in fee-for-service. A key goal for Arizona, as reflected in a Medicaid procurement last October, is to have duals in the same plan for Medicare and Medicaid, says Katrina Cope, director, Medicare operations for Health Choice, an Arizona-based “safety-net” plan operator that has one of the state’s eight D-SNPs. Arizona still is working with CMS on ways to smooth the “transition” for duals at such times as when they age into Medicare or lose Medicaid eligibility, she adds. http://aishealth.com/archive/nman032714-02?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=37253579

Today's Datapoint

35 … accountable care organization agreements have been signed by Aetna Inc., which expects that number to double in the next year, according to Charles Kennedy, M.D., CEO of accountable care solutions for the insurer.

Quote of the Day

“What happens [to insurance plans for small employers] in the fall of 2015, when we are likely to see significant increases in premiums across the board, not just because of the idea that small employers who renewed early are now going to face the policy that you have with essential health benefits. We are talking about layering on top of that the health insurance excise tax and other taxes.” — Jack Rovner, a principal for The Health Law Consultancy in Chicago, told AIS’s Health Plan Week.

Thursday, April 10, 2014

In 2012, national expenditures on personal health care totaled $20.4 trillion, broken down by payer as follows

• 34% private health insurance • 23% Medicare • 16% Medicaid • 14% out-of-pocket (excluding premiums) • 9% other party payers • 4% other health insurance programs Source: "Report to the Congress: Medicare Payment Policy," Medicare Payment Advisory Commissions (MEDPAC), http://www.medpac.gov/documents/Mar14_EntireReport.pdf

Wednesday, April 9, 2014

Historic release of data gives consumers unprecedented transparency on the medical services physicians provide and how much they are paid

Today, as part of the Obama administration’s work to make our health care system more transparent, affordable, and accountable, Health and Human Services (HHS) Secretary Kathleen Sebelius announced the release of new, privacy-protected data on services and procedures provided to Medicare beneficiaries by physicians and other health care professionals. The new data also show payment and submitted charges, or bills, for those services and procedures by provider. “Currently, consumers have limited information about how physicians and other health care professionals practice medicine,” said Secretary Sebelius “This data will help fill that gap by offering insight into the Medicare portion of a physician’s practice. The data released today afford researchers, policymakers and the public a new window into health care spending and physician practice patterns.” The new data set has information for over 880,000 distinct health care providers who collectively received $77 billion in Medicare payments in 2012, under the Medicare Part B Fee-For-Service program. With this data, it will be possible to conduct a wide range of analyses that compare 6,000 different types of services and procedures provided, as well as payments received by individual health care providers. The information also allows comparisons by physician, specialty, location, the types of medical service and procedures delivered, Medicare payment, and submitted charges. Physicians and other health care professionals determine what they will charge for services and procedures provided to patients and these “charges” are the amount the physician or health care professional generally bills for the service or procedure. "Data transparency is a key aspect of transformation of the health care delivery system,” said CMS Administrator Marilyn Tavenner. “While there’s more work ahead, this data release will help beneficiaries and consumers better understand how care is delivered through the Medicare program.” Last May, CMS released hospital charge data allowing consumers to compare what hospitals charge for common inpatient and outpatient services across the country. To view the physician dataset, please visit: http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Physician-and-Other-Supplier.html

Can UnitedHealthcare’s New Plan to Block Retail Copay Coupons Work?

By Lauren Flynn Kelly - April 4, 2014 In a recent pharmacy benefit update to its broker website, UnitedHealthcare unveiled a new tactic to block pharmaceutical manufacturer-offered copay coupons, which the insurer and many of its peers argue undermine payers’ formulary designs and raise drug costs. Unlike previously reported methods employed by health plans and PBMs to curb the use of coupons among commercially insured members, the insurer will work with its network retail pharmacies to discontinue their use as of July 1. The forthcoming “retail coupon initiative” is an ambitious move, and one that raises a lot of questions, such as how many pharmacies will actually participate and what will motivate them to do so. Will large chains, for instance, be willing to cooperate? And if one does, will it be expected to do the same for other payers that choose to take a similar approach? How will pharmaceutical manufacturers respond to the effort? When asked about some of the logistics of the program, UnitedHealthcare spokeswoman Lynne High responded with the following statement: “Our goal at UnitedHealthcare is to ensure consumers have access to affordable health care. That includes helping our members find the lowest-cost option for their prescription drugs. Use of manufacturer copayment coupons can drive patients away from lower cost, therapeutically equivalent alternatives and can significantly increase overall healthcare costs.” High pointed out that redemption of copay coupons is prohibited in federally sponsored health care programs, including Medicare and Medicaid, and that it is standard practice for mail-order pharmacies to not accept the coupons for 90-day maintenance medications. “We provide our members with several options including helping them find the therapeutically equivalent generic drug at a significantly lower cost; offering the convenience of a mail-service program; and covering $4 retail pharmacy copay programs,” she added. “Assistance from customer care representatives is available to members who can call the number on the back of their ID card or visit myuhc.com.” What challenges do you think UnitedHealthcare will face getting this initiative off the ground? And are others likely to follow suit? http://aishealth.com/blog/pharmacy-benefit-management/can-unitedhealthcares-new-plan-block-retail-copay-coupons-work?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=36937302

Today's Datapoint

46% … of data security breaches in health care are the result of unintentional employee actions, and employee negligence is the security threat that 75% of health care organizations are most concerned about, according to the Ponemon Institute’s Fourth Annual Study on Patient Privacy & Data Security.

Quote of the Day

“It was important that HHS/CMS recognize the sort of administrative challenges [for plans] of this rollout [of public exchanges] and give a little flexibility. I think on the [medical loss ratio] side that was a bit of recognition that due to problems not of their own making the plans deserved a little flexibility there.” — Matt Eyles, executive VP of Avalere Health LLC, told AIS’s Health Plan Week in an interview on HHS’s March 11 proposed rule that, among other things, raised the possibility of easing medical loss ratio requirements on health plans.

Tuesday, April 8, 2014

According to a recent survey of physician practices:

• 23.7% reported joining an ACO • 15.7% were planning to become involved with an ACO within the next 12 months • 60.6% reported no involvement and no plans to become involved with an ACO Source: "Physician Practice Participation in Accountable Care Organizations: The Emergence of the Unicorn," Health Services Research, abstract only, March 14, 2014, http://onlinelibrary.wiley.com/doi/10.1111/1475-6773.12167/abstract;jsessionid=B557AB05B7B25B434C69A4DDA3186B48.f04t02

Today's Datapoint

At least 75% …of “essential community providers” in a service area must be included in the network of plans on the Connecticut insurance exchange, according to Claire McAndrew, private insurance program director at Families USA.

Quote of the Day

“There are several reasons [Republican states are reconsidering their opposition to Medicaid expansion]. They’re starting to get pressure again from providers and the public wanting the state to expand. But the bigger impetus is that you’re starting to see states go the alternative expansion route, and get approval from CMS for doing so…. As more and more states are coming up with these flexible approaches, and CMS is approving aspects of them, it’s really piquing the interest of governors in conservative states or split states.” — Laura Summers, director of state intelligence at Leavitt Partners, LLC, told AIS’s Health Reform Week.

Monday, April 7, 2014

Average Views Per Video on Healthcare Industry YouTube Channels by Year

1. 2011 - 206 2. 2012 - 3,354 3. 2013 - 5,534 Source: Measuring Health Care Business Social Media Activity 2013, MCOL

Uninsurance Rate for Adults Age 18-64 for States Expanding Medicaid

1. Q1 2013 - 15.0% 2. Q2 2013 - 16.5% 3. Q3 2013 - 16.4% 4. Q4 2013 - 15.4% 5. Q1 2014 - 12.4% Source: Urban Institute

10 overused tests waste healthcare dollars

1. Nuclear stress tests, and other imaging tests, after heart procedures 2. Yearly electrocardiogram or exercise stress test 3. PSA to screen for prostate cancer 4. PET scan to diagnose Alzheimer's disease 5. X-ray, CT scan or MRI for lower back pain 6. Yearly Pap tests 7. Bone density scan for women before age 65 and men before age 70 8. Follow-up ultrasounds for small ovarian cysts 9. Colonoscopy after age 75 10. Yearly physical Source: AARP

In fiscal year 2013

Medicaid Fraud Control Units reported 1,341 criminal convictions: 74% involved fraud, while 26% involved patient abuse and neglect. Source: "Medicaid Fraud Control Units Fiscal Year 2013 Annual Report," Office of Inspector General, U.S. Department of Health and Human Services, March 2014, http://oig.hhs.gov/oei/reports/oei-06-13-00340.pdf

Ryan on PPACA: ‘I don’t think it can last’

BY DEREK WALLBANK April 4, 2014 . April 4 (Bloomberg) -- House Budget Committee Chairman Paul Ryan said he rejects the premise that President Barack Obama’s health-care law can’t be repealed now that its first class of 7 million enrollees has signed up. “I don’t think it can last,” Ryan said in an interview with Bloomberg Television to air on “Political Capital with Al Hunt” this weekend. Ryan this week unveiled a budget plan that seeks to repeal the 2010 law known as Obamacare and would revise the U.S. safety net in an effort to eliminate the deficit in 10 years. The House will vote on the plan next week. House Democrats will release their alternative as soon as April 7. The Republican budget proposal will serve as a contrast with Democrats’ fiscal priorities before the U.S. midterm election on Nov. 4. Senate Democratic leaders have said they plan to tie House members vying for Senate seats in Colorado, Montana and Louisiana to Ryan’s proposal. “This is the fourth year we’ve passed a budget like this, fourth year we’ve said here’s how we plan on balancing the budget and paying off the debt,” Ryan said. Ryan and Senate Budget Committee Chairman Patty Murray agreed in December on a two-year budget deal that sets top-line spending at $1.014 trillion for the 2015 fiscal year that starts Oct. 1. As such, Republicans don’t have to prepare a budget, Ryan said, though “we think we should say what we believe in if we don’t like the direction the country’s headed.” 7 Million Democrats contend that the enrollment the White House says passed 7 million by the March 31 deadline shows Obamacare can’t be unwound. Ryan said he disagrees with that premise. House Republicans, who have voted to repeal, defund or delay the health-care law 55 times since taking over the chamber’s majority in 2011, are working to draft a replacement. That plan, which Ryan has been involved in creating, could be unveiled as soon as later this month. “The architecture of this law is so fundamentally flawed that I think it’s going to collapse under its own weight,” said Ryan, a Wisconsin Republican. “And the sooner those of us who want true, real reform can show a better way forward, the faster we can repeal.” Ryan said an alternative plan should remove the federal “command and lead in the health-care system.” Balance Sheet Ryan’s budget plan would boost defense spending offset by cuts to non-military programs that could reduce spending on everything from regulatory agencies and national parks. The starkest contrasts between Ryan and Democrats are on balance -- Ryan wants to balance the federal budget in 10 years and Obama’s budget doesn’t -- and on how deficit reduction would be achieved. Ryan envisions significant changes to entitlement spending, including cuts to food stamps and Medicaid that knit together the U.S. safety net. Ryan has called for a fundamental reappraisal of the way the U.S. addresses poverty 50 years after President Lyndon Johnson declared a war on poverty -- which created what’s now 92 anti-poverty programs costing $799 billion annually. Ryan’s budget would keep federal Pell grants for college study capped at $5,730 and tighten eligibility. He’d also make Congress appropriate all the money for the grants annually. Democrats have latched on to the change as one that would cut aid to students as tuition continues to rise faster than inflation. Student loan debt has ballooned to $1.2 trillion as families borrow to cover the costs. Ryan said Republicans are worried that increases in federal student aid have contributed to colleges raising costs. ‘Tuition Inflation’ “So the problem is, are we feeding tuition or are we getting at the root cause of this tuition inflation?” Ryan said. “That’s the argument we’re trying to make. Instead of just doing more of the same and getting the same predictable outcome, why don’t we try and get at the root cause of why does college cost so much in the first place?” Ryan’s budget doesn’t specifically back a tax-code revision proposed by Ways and Means Committee Chairman Dave Camp, who’s blocked from another term as chairman by Republican term limits and will retire after this session of Congress. The budget panel doesn’t write tax laws, Ryan said, though he said lawmakers should “continue this conversation” begun by Camp’s proposal. Ryan, a senior member of the Ways and Means panel and his party’s 2012 vice presidential nominee, is seen as a front- runner to become Ways and Means chairman. Texas Republican Kevin Brady, a member of the panel, is also interested in the job. Ryan deferred when pressed on whether he wants the job as chairman of the tax-writing panel. “I think it’s just too early to get into that,” he said. http://www.benefitspro.com/2014/04/04/ryan-on-ppaca-i-dont-think-it-can-last?eNL=533f3a29160ba01e518b4617&utm_source=BenefitsProDaily&utm_medium=eNL&utm_campaign=BenefitsPro_eNLs&_LID=144817897

New Hampshire Gov. Maggie Hassan

New Hampshire Gov. Maggie Hassan (D) on March 27 signed a bill expanding Medicaid under a two-and-a-half-year pilot program that will let the newly eligible use federal dollars to purchase private plans. The expansion will cover roughly 50,000 low-income adults with annual incomes up to 138% of the federal poverty level, or $15,856 a year for a single adult, according to a March 27 Associated Press article. New Hampshire is among a handful of states that have adopted a private-market approach to the Medicaid expansion. The state estimates that 12,000 adults could begin receiving coverage in about a month under an existing program to subsidize employer-based coverage, and another 38,000 individuals would receive coverage through the state’s Medicaid managed care program starting on or about July 1, the article said. The expansion is projected to cost $340 million a year when fully implemented, the AP said. (Reprinted from AIS’s Health Reform Week's e-News Alert)

Senate Majority Leader Harry Reid

Senate Majority Leader Harry Reid (D-Utah) has said that he is open to making minor legislative changes to the Affordable Care Act, according to an April 2 article in the Washington Examiner. After an April 1 private meeting with Senate Democrats, Reid told reporters that the Senate already has made minor adjustments, and that he will take up measures to further tweak the law. “Anything we can do to let people know that we're not deaf to issues that may come up,” Reid said, according to the Examiner. “This is a big bill. And if we had working partners, as we used to have, with Republicans, there are other things we could do to work on this bill.” Among other things, Reid said that the Senate would vote this week on a provision that would exclude volunteer firefighters from the employer mandate. In addition, several Democratic senators recently introduced legislation that would end the employer mandate for employers with fewer than 100 employees. Currently, employers with fewer than 50 full-time workers are exempt. The proposal also would direct state insurance regulators to establish models for selling insurance across state lines — a proposal favored by the GOP — and restore money for the creation of “consumer-driven” health insurance cooperatives to give people more choices outside of the health care exchanges, the Examiner reported. Reid, who controls the Senate floor schedule, didn’t comment on whether he would allow votes on these proposals. (Reprinted from AIS’s Health Reform Week's e-News Alert)

As Copay Coupons Rise, Payers Should Eye Drugmakers’ Efforts to Enrich Offsets (with Table: Co-Pay Offset Program Trended Script Utilization for MS Products)

Reprinted from DRUG BENEFIT NEWS, biweekly news and proven cost management strategies for health plans, PBMs, pharma companies and employers. By Lauren Flynn Kelly, Editor March 21, 2014 Volume 15 Issue 6 As health plans and PBMs consider how to address manufacturer-offered copay cards and other discounts on brand-name drugs — whether by encouraging their use among members, blocking the coupons or taking a more targeted approach — payers should keep a close watch on pharmaceutical manufacturers’ attempts to refine these programs to match competitors and gain market share. Keeping abreast of changes in specialty categories like multiple sclerosis (MS) and rheumatoid arthritis (RA), which are rich with therapeutic options, may be especially important as those categories experience high copay offset utilization, suggests Zitter Health Insights’ latest Co-Pay Offset Monitor. In the new industry report, the research firm observed 561 copay offset programs being offered for 708 brand-name drugs as of winter 2014, compared with 531 programs for 650 brands in summer 2013. Of those 708 brand-name drugs with copay offset programs, 20% are for branded biologic drugs, and of those biologics, 60% are focused on chronic diseases, reports Zitter. A copay offset program can be applied to more than one brand, and vice versa, points out the firm. Zitter conducted the research from July through December 2013. A copay offset program refers to a manufacturer-sponsored copay program for branded pharmaceutical products directed at the commercially insured population, clarifies the research firm. This is separate from a patient assistance program (PAP), which is a manufacturer-sponsored copay assistance nonprofit foundation or program to help uninsured patients (or those denied coverage by their commercial plans) who meet specific financial eligibility criteria, or a foundational assistance program, which is an independent nonprofit foundation or program to help underinsured patients who meet specific financial eligibility requirements. Within those 30 additional programs identified in the second half of 2013, Zitter analyst Sneha Shah suggests that there may have been a shift of multiple brands in single copay programs splitting into multiple programs, or new programs accompanying the introduction of new drugs. “What was really notable was when a specialty drug was introduced to the market, then it usually was paired with a copay program,” Shah tells DBN. She adds that she wouldn’t be surprised to see that 20% portion of branded biologics grow as more specialty drugs are introduced. “Cost sharing is not going to go away, especially as specialty medications are becoming the future,” she remarks. “These medications are expensive and tools like copay offset programs and other assistance programs are going to increase. So if specialty medications are becoming the future, then there has to be an integrated approach to tackle this problem, where patients can actually access those medications and in that case copay offset and [other discount] programs would work.” The company identified RA as the category with the highest copay offset program utilization, followed by psoriasis and MS. These findings are consistent with a recent internal analysis performed by Prime Therapeutics LLC that showed high copay coupon/PAP use among autoimmune and MS patients (DBN 2/21/14, p. 1). “A lot of these programs have zero-dollar copays or patients pay only $5 or $10,” observes Shah. “They are quite rich in benefits, so I am not surprised that utilization is so high.” Of a study sample representing 25% of national specialty pharmacy claims, roughly 55% of the 678,346 eligible RA prescriptions processed during the third quarter of 2013 were associated with a copay offset program. Meanwhile, 27.8% of the 342,541 MS prescriptions were supported by a copay offset program in the same quarter. Within the MS category, however, utilization varied wildly over a year and a half (see chart, p. 3). For example, both Copaxone (glatiramer acetate) and Aubagio (teriflunomide) experienced a “sharp nosedive” but eventually “normalized,” says Shah. Drug Companies Tweak Copay Programs What accounts for such drastic swings in utilization? Shah explains that in the first quarter of 2012, Copaxone maker Teva Pharmaceuticals Industries Ltd. had dramatically increased prices and the drug was removed from most formularies. Teva swiftly recovered by enhancing access to the medication by increasing the annual maximum copay offset from $6,000 to $12,000, she says. Meanwhile, when Genzyme Corp.’s oral agent Aubagio was introduced in the fourth quarter of 2012, it came with a three-month free trial and $35 copays after that. When utilization dipped in the following quarter, the drugmaker also enhanced its copay offset program so that patients would pay only $10. Shah points out that most of these offers have expiration dates, and the drugmaker has the freedom to change the terms of the offer at any time. Moreover, the firm observed that debit cards account for about 11% of biologics copay offset programs, where none exist for traditional drugs. Shah suggests that’s because the benefits offered by copay offset programs for specialty drugs tend to be “richer” than for traditional therapies. Other forms of copay offset offered by specialty pharmaceutical manufacturers include coupons/cards (68%), reimbursement accounts (16%) and the less frequently used mobile coupon, buy-and-bill and direct programs. In fact, only one program observed by Zitter offered a mobile coupon in combination with a copay card, whereas those discounts are more frequently seen in the small molecule realm (3% of 446 programs), adds Shah. Co-Pay Offset Program Trended Script Utilization for Multiple Sclerosis Products Through Specialty Pharmacy Provider (Program Scripts/Eligible Scripts With a Co-Pay) SOURCE: Zitter Health Insights’ Co-Pay Offset Monitor, Winter 2014. http://aishealth.com/archive/ndbn032114-02?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=36497129

Today's Datapoint

100% … is the increase since 2010 in criminal attacks on health care data security systems, according to the Ponemon Institute’s Fourth Annual Study on Patient Privacy & Data Security.

Quote of the Day

“It’s like you wouldn’t want to buy a car without an adequate engine. You don’t want to buy an insurance plan that doesn’t have an adequate network, because when you actually go to use that product, it’s not going to work.” — Claire McAndrew, private insurance program director at Families USA, told AIS’s Health Reform Week.

Sunday, April 6, 2014

5 Ways Big Data is Reducing Healthcare Costs

1. Faster time to treatment 2. Reduced hospitalizations and readmissions 3. Improved physician performance 4. Risk stratification 5. Improved medication therapy management (MTM) Source: Big Data Startups/Blog, March 17, 2014

Breakdown of The 4.2 million+ Who Selected Marketplace Plans From 10/2013 - 3/2014

1. 55 percent are female and 45 percent are male 2. 31 percent are age 34 and under 3. 25 percent are between the ages of 18 and 34 4. 63 percent selected a Silver plan (up one percentage point over the prior reporting period)while 18 percent selected a Bronze plan (down one point) 5. 83 percent selected a plan and are eligible to receive Financial Assistance (up one point) Source: U.S. Department of Health & Human Services

Ten YouTube Channels to Subscribe to for In-Depth Information on Healthcare

1. Robert Wood Johnson Foundation 2. AJMC TV (American Journal of Managed Care) 3. BMJ (British Medical Journal) 4. TEDMED 5. The Advisory Board Company) 6. Kaiser Health News 7. CMSHHSgov (Centers for Medicare & Medicaid Services) 8. The JAMA (Journal of the American Medical Association) Report 9. Kaiser Family Foundation 10. CommonwealthFund Source: HealthshareTV

NCQA: Top 20 Private Health Insurance Plans

1. Harvard Pilgrim Health Care - HMO (ME, MA) 2. Kaiser Foundation Health Plan of the Northwest - HMO (OR, WA) 3. Blue Cross and Blue Shield of Massachusetts HMO Blue - HMO (MA) 4. Harvard Pilgrim Health Care - PPO (MA) 5. Harvard Pilgrim Insurance - PPO (MA) 6. Tufts Associated Health Maintenance Organization - HMO (MA) 7. Kaiser Foundation Health Plan of Northern California - HMO (CA) 8. Tufts Benefit Administrators - PPO (MA, RI) 9. Harvard Pilgrim Health Care of New England - HMO (NH) 10. Kaiser Foundation Health Plan of Ohio - HMO (OH) 11. UPMC Health Plan - HMO (PA) 12. UPMC Benefit Management Services - HMO (PA) 13. Kaiser Foundation Health Plan of Colorado - HMO (CO) 14. Blue Cross and Blue Shield of Massachusetts - PPO (MA) 15. Capital Health Plan - HMO (FL) 16. Kaiser Foundation Health Plan of the Mid-Atlantic States - HMO (DC, MD, VA) 17. Kaiser Foundation Health Plan of Southern California - HMO (CA) 18. Capital District Physicians' Healthcare Network - HMO (NY) 19. Capital District Physicians' Health Plan - HMO (NY) 20. Kaiser Foundation Health Plan of Georgia - HMO (GA) Source: The National Committee for Quality Assurance

Percentages of persons under age 65 with private health insurance coverage who were enrolled in a high-deductible health plan

1. 2008 - 19.2% 2. 2009 - 22.5% 3. 2010 - 25.3% 4. 2011 - 29.0% 5. 2012 - 31.1% 6. 2013 ( Jan. – Sept. ) - 33.4% Source: CDC/NCHS, National Health Interview Survey


Total prescription drug expenditures in the U.S. are projected to increase 3–5% across all settings in 2014, including a 5–7% increase in clinic spending and a 1–3% increase in hospital spending, according to a recent analysis. Source: "National trends in prescription drug expenditures and projections for 2014," American Journal of Health-System Pharmacy, abstract only, March 2014, http://www.ajhp.org/content/71/6/482.abstract


In the 2011 - 2012 two-year period, 18.2% of U.S. adults experienced some sort of mental illness; the national rate of serious mental illness was 4.0%. Source: "State Estimates of Adult Mental Illness from the 2011 and 2012 National Surveys on Drug Use and Health," The NSDUH (National Survey on Drug Use and Health) Report, SAMHSA (The Substance Abuse and Mental Health Services Administration), February 28, 2014, http://www.samhsa.gov/data/2k14/NSDUH170/sr170-mental-illness-state-estimates-2014.htm


According to a national survey of private pediatricians and family physicians, 10% of physicians had seriously considered discontinuing providing all childhood vaccines to privately insured patients because of cost issues. Source: "Vaccine Financing From the Perspective of Primary Care Physicians," Pediatrics, abstract only, February 24, 2014, http://pediatrics.aappublications.org/content/early/2014/02/18/peds.2013-2637.abstract


A recent study compared medical costs and utilization for high-risk patients, between a control group and a group of patients in a patient-centered medical home (PCMH) from 2009 to 2011, and found: • In year 1, the costs for the PCMH group were $107 lower per patient per month • In year 2, the costs for the PCHM group were $75 lower per patient per month • The PCMH group experienced a significantly greater reduction in inpatient admissions in all 3 years (61, 48, and 94 hospitalizations per 1000) Source: "Medical Homes and Cost and Utilization Among High-Risk Patients," American Journal of Managed Care, March 14, 2014, http://www.ajmc.com/publications/issue/2014/2014-vol20-n3/Medical-Homes-and-Cost-and-Utilization-Among-High-Risk-Patients


According to a recent study of Emergency Department (ED) visits in Massachusetts during 2004 to 2009, the implementation of health care reform in 2006 was associated with an increase of between 0.2% and 1.2% in ED visits per year during reform and 0.2% and 2.2% after reform, compared with the period before reform. Source: "Increased Use of the Emergency Department After Health Care Reform in Massachusetts," Annals of Emergency Medicine, abstract only, March 24, 2014, http://www.annemergmed.com/article/S0196-0644(14)00121-8/abstract

States With Biggest Impact (Premium Increases and Benefit Reductions) From Proposed Medicare Advantage Cuts Per Senior

MA Enrollment (Feb. 2014) Impact Alabama 221,361 $65 -$75 Hawaii 107,960 $65 -$75 New Jersey 216,981 $65 -$75 New York 1,145,899 $65 -$75 Texas 967,287 $65 -$75 Louisiana 213,923 $55 -$65 New Mexico 107,265 $55 -$65 North Carolina 476,615 $55 -$65 Ohio 779,401 $55 -$65 Washington 328,801 $55 -$65 Source: America's Health Insurance Plans

Adverse Events Identified Among Medicare Skilled Nursing Facilities Residents by Category

Types of Adverse Events Percentage Events Related to Medication 37% Medication-induced delirium or other change in mental status 12% Excessive bleeding due to medication 5% Fall or other trauma with injury secondary to effects of medication 4% Constipation, obstipation, and ileus related to medication 4% Other medication events 14% Events Related to Resident Care 37% Fall or other trauma with injury related to resident care 6% Exacerbations of preexisting conditions resulting from an omission of care 6% Acute kidney injury or insufficiency secondary to fluid maintenance 5% Fluid and other electrolyte disorders (e.g., inadequate management of fluid) 4% Venous thromboembolism, deep vein thrombosis (DVT), or pulmonary embolism (PE) related to resident monitoring 4% Other resident care events 14% Events Related to Infections 26% Aspiration pneumonia and other respiratory infections 10% Surgical site infection (SSI) associated with wound care 5% Urinary tract infection associated with catheter (CAUTI) 3% Clostridium difficile infection 3% Other infection events 5% Source:Office of Inspector General (OIG), Department of Health and Human Services

Saturday, April 5, 2014


According to a recent survey, while 77% of physicians are accepting Medicare patients, only 50.6% of physicians surveyed said they accept Medicaid. Source: 'Survey shows patients in many cities wait weeks for appointments,' Medical Economics, February 26, 2014, http://medicaleconomics.modernmedicine.com/medical-economics/news/survey-shows-patients-many-cities-wait-weeks-appointments

According to a recent study of ICU telemedicine interventions from 56 ICUs, compared to control subjects:

• Among those who stayed in the ICU for ≥ 7 days, adjusted hospital length of stay (LOS) was reduced, on average, by 0.5 day and adjusted ICU LOS was reduced by 1.1 day • Among those who stayed in the ICU for ≥ 14 days, adjusted hospital LOS was reduced by 1.0 day, on average, and adjusted ICU LOS was reduced by 2.5 days • Among those who stayed in the ICU for ≥ 30 days, adjusted hospital LOS was reduced by 3.6 days, on average, and adjusted ICU LOS was reduced by 4.5 day Source: "A Multicenter Study of ICU Telemedicine Reengineering of Adult Critical Care," CHEST, abstract only, March 2014, http://journal.publications.chestnet.org/article.aspx?articleID=1788059

Carriers Defend Use of Narrow Networks as Fair, Market-Driven Options for Consumers

Reprinted from HEALTH PLAN WEEK, the most reliable source of objective business, financial and regulatory news of the health insurance industry. By Patrick Connole, Managing Editor March 24, 2014 Volume 24 Issue 10 Health insurers are on the defensive over the way some provider networks for public exchanges are designed, leading to criticism that consumers buying coverage on the new marketplaces don’t have access to out-of-network care. States such as New York are pondering changes to exchange rules this month that would mandate out-of-network coverage, and the federal government on March 14 confirmed that CMS plans to increase monitoring of network adequacy in general and inclusion of providers for low-income populations in particular. Against this backdrop, industry sources say there is an Alice in Wonderland-like quality about the scrutiny of provider networks on exchanges since they say consumer choice is the foundation of the new marketplaces. After all, they contend, narrow networks are in place to help make “affordable” coverage possible, notably for those previously uninsured. Carriers in many markets set up narrow networks with providers who agree to lower reimbursement in exchange for more volume. In some cases, however, these plans have left academic medical centers and other specialists out, which has raised the hackles of some consumers and triggered regulatory reviews. Industry sources in New York say it is not clear what if anything will happen with proposals to mandate out-of-network coverage. The issue is part of budget negotiations and has been mentioned by the state exchange as a possibility for the 2015 plan year. At the federal level, CMS on March 14 released the “CMS 2015 Call Letter to Issuers in the Federally-facilitated Marketplaces,” which included measures that would require issuers to submit network adequacy data to the agency as part of the review process for participating in public marketplaces. CMS will review this data and assess network adequacy for 2015, as well as help refine the network adequacy review process for future benefit years, including continuing to develop a process for collecting provider network data. The review, according to market sources, will help to ensure that qualified health plan networks are sufficient in number and types of providers, so that all services will be accessible to enrollees without unreasonable delay in compliance with applicable regulations. There is also a broader effort to monitor network adequacy, for example, through CMS’s tracking of complaints by consumers. The agency also said starting in 2015 issuers on federal exchanges would have to offer provider networks that include 30% of the essential community providers (ECPs) in their service region, compared with the 20% threshold in place for 2014. As one insurance industry executive tells HPW, speaking anonymously, “if we don’t have the ability to offer a range of products at various price points with a full range of benefits, any limitation on that is something that we don’t want to do. It would be like telling Wal-Mart you can only sell toilet paper if it meets this standard.” And, the source adds, it is not like closed networks were born with the reform law; the concept has been around since the start of HMOs and is also part of the many accountable care organizations sprouting up all over the country. “It is a supply and demand market, even in the health insurance world, and the extent to which regulation limits consumer options and our options to meet consumer demand would just be unfortunate,” the source adds. And to put in dollar-and-cent terms, the New York State Conference of Blue Cross and Blue Shield Plans (NYSCOP) tells HPW that if the state decides to force out-of-network coverage for exchange products, premiums would rise nearly 30% as a result. NYSCOP is a partnership of Rochester, N.Y.-based Excellus Blue Cross Blue Shield and New York City-based Empire BlueCross BlueShield, a unit of WellPoint, Inc. Stakeholders Fear Consumerism May Lose out For some industry players, the idea that narrow networks or out-of-network practices are being questioned is a big drag on market development. “What it is, is a killer for the hope of price competition,” Mark Rust, office managing partner for law firm Barnes & Thornburg LLP in Chicago, tells HPW. “Because one of the key factors in introducing price competition as the health care delivery world evolves is going to be narrow networks. And the proof of that is the degree to which plans on the exchange quickly went to narrow networks to try to deliver to the market a more bare-boned cost product.” States like California, New Hampshire, New York and Washington, among others, are considering more requirements for 2015 to broaden exchange networks or make out-of-network coverage possible, even if as an add-on rider enrollees can purchase in order to keep their favorite providers. Rust, however, thinks the issue has the potential to seep into private exchanges as well, where consumer-driven health plans are starting to thrive. “The move to do that is completely counterproductive to the hope that the exchanges and the markets will help to push down price,” he says. Public exchanges will have a comparatively small slice of the insurance sector, so “where this has its greatest potential impact across society is in the considered move by employers from a defined benefit health plan to a defined contribution,” Rust adds. He explains that if employees are being given more power over their insurance purchasing via exchanges and defined contribution, they need all care and price options on the table for consideration. The message from employer-sponsored health plans to employees is that “‘it’s a defined contribution and that you can make your own choice with the amount we contribute to you. And there are several plans that you can choose from; the only thing is some of them don’t have the university hospitals or you can add some of your additional money and you can have broad networks.’ When this happens you’re going to have consumers saying, hmmm. How much do I really use the university hospitals anyway?” Rust says. Exchanges Attract Fresh Concerns On the other side of the issue are specialist providers who say the attention to network adequacy is nothing new, but that with the advent of public exchanges, it is something that has to be monitored anew. Kirsten Sloan, senior director of policy for the American Cancer Society Cancer Action Network, tells HPW that insurers also should be transparent, so people with special needs, such as those who are living with cancer, know if their own providers are included in the exchange network. “Transparency right up front is very important,” she says. For a long time, the most vital issue for cancer patient advocates was getting covered, so with guaranteed issue in place under the reform law, pre-existing conditions are no longer a barrier to getting insured care. But now, provider networks are a priority issue. “Any time a managed care plan or FFS system has a network of providers that they contract with, we want to make sure they are broad enough to encompass specialists,” including oncologists and other cancer-related care providers, Sloan says. The reaction of consumers on exchanges to what may be a new concept of provider networks is part of human nature, says one academic. Mark Hall, professor of law and public health at Wake Forest University, tells HPW it comes down to the fact that some people don’t understand the importance of network access until they get a serious condition. “The scenario is that they are reasonably healthy and something bad happens and then they have buyer’s remorse,” he says. http://aishealth.com/archive/nhpw032414-02?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=36379527

Friday, April 4, 2014

Cost of the Affordable Care Act to Large Employers

The total cost of ACA to all large U.S. employers 2014 to 2023 $151 to $186 billion Cost per employee, 2014 to 2023 $4,800 to $5,900 Cost per large employer, 2014 to 2023 $163 to $200 million Percentage increase in employer-provided health care costs from ACA 4.3% in 2016 5.1% in 2018 8.4% in 2023 Notes: Large U.S. employers have 10,000 or more employees Source: American Health Policy Institute

Medicaid enrollment grows by more than 3 million

HHS BLOG Posted: April 4, 2014 http://www.hhs.gov/healthcare/facts/blog/2014/04/medicaid-chip-determinations-february.html Medicaid enrollment grows by more than 3 million By Kathleen Sebelius, Secretary of Health and Human Services Because of the Affordable Care Act, 7.1 million people have signed up for quality, affordable, private health insurance options in the Health Insurance Marketplace through March 31. And, according to a new CMS report released today, 3 million additional individuals enrolled in Medicaid or CHIP through the end of February 2014 compared to enrollment before the Health Insurance Marketplace opened on October 1, 2013. Enrollment in states that adopted the Medicaid coverage expansion increased five-fold compared to states that are not expanding Medicaid. We expect enrollment in March to be even higher, although individuals can continue to enroll in Medicaid all year round. Eligibility determinations also continued to grow: between October 2013 and February 2014, 11.7 million people were determined eligible for Medicaid and CHIP by State agencies, up from 8.9 million reported last month for the October – January period. The Affordable Care Act provides states with new opportunities to expand their Medicaid programs to increase access to affordable coverage. In states that expand coverage, most individuals under age 65 with incomes up to 133 percent of the Federal Poverty Level ($15,521 for an individual and $31,721 for a family of four) will be eligible for Medicaid coverage. To date, 26 states and DC have expanded their Medicaid programs. States that have expanded Medicaid saw a much more dramatic increase in Medicaid enrollment than States that have not. According to today’s report, among states that adopted the Medicaid coverage expansion and whose expansions were in effect in February, Medicaid and CHIP enrollment rose by 8.3 percent compared to the months prior to Marketplace open enrollment period. States that have not expanded Medicaid coverage reported an increase in Medicaid enrollment of 1.6 percent over the same period. There's no deadline for states to expand, so we're going to keep working with the remaining states as they decide to come on board. Not only is expanding Medicaid coverage helping many people gain health coverage, it’s a good deal for states: Coverage for newly eligible adult beneficiaries is fully federally paid for under the Affordable Care Act for the first three years, and never less than 90 percent for the years following. Expanding coverage reduces hospitals’ uncompensated care, lowers “cost shifting” to businesses that see higher health insurance premiums as some of the costs of caring for the uninsured are passed on to them, and strengthens local economies. The increase in Medicaid enrollments across the country is encouraging, but more work is left to do to ensure that the millions of uninsured Americans eligible for these programs gain coverage. Medicaid does not have a set enrollment period so people may be determined eligible for coverage at any time. To read today's report visit: http://medicaid.gov/AffordableCareAct/Medicaid-Moving-Forward-2014/Downloads/February-2014-Enrollment-Report.pdf

Wednesday, April 2, 2014

March Madness: With Scant Data, Actuaries Rely on Risk Models for Setting 2015 Rates

Reprinted from INSIDE HEALTH INSURANCE EXCHANGES, a hard-hitting newsletter with news and strategic insights on the development and operation of public and private exchanges. By Steve Davis, Managing Editor March 20, 2014 Volume 4 Issue 6 In May, insurance carriers will begin filing their 2015 rates for the products they intend to sell on government-run exchanges next fall. But actuaries are just beginning to analyze the limited information they have on the 2014 exchange enrollees, including their potential risk. While health insurers have more information about enrollees than they had a year ago, they still don’t have much to work with. The health risk profile of enrollees is still a bit of a guess. And there is an expectation that the healthiest people will wait until the last possible moment to sign up, which means carriers will have no information about those who enrolled in late March. A variety of factors could make double-digit rate hikes unavoidable for some products sold on exchanges. According to the latest enrollment numbers from HHS, exchange enrollees are a little bit older and include more females and fewer children than most carriers anticipated. And enrollment numbers are lower than they expected. Rate-setting actuaries must also factor in the insurance tax mandated by the Affordable Care Act (ACA), and the possibility that people in some states will be allowed to remain in non-ACA-compliant plans until 2016. “I think the health plans are still a little in the dark about what their risk will look like. And it doesn’t take much for premium rate increases to exceed 10%,” explains Chris Carlson, a principal and consulting actuary at Oliver Wyman. Carlson says the underlying risk, in a best-case scenario, will increase rates 6% to 8%. Lower-than-expected enrollment could add another 1% to 2%. The insurance tax, which became effective in 2014, may add an additional 0.5% to 1.0% to premiums for 2015 as the tax increases from $8.0 billion to $11.3 billion. The overall impact the insurance tax will have on 2015 rates, compared to what’s built into 2014 rates, is about 0.5%, Carlson says. The percentage increase is dependent on how much total industry premiums change in 2014 relative to 2013 and the mix between for-profit and tax-exempt insurers. “All of a sudden you’re over 10%, and I think that is where the greatest concern comes in.” Some regulators simply won’t approve rates above a certain level, he tells HEX. Carriers also will need to factor in the expected impact of the reinsurance, risk corridors and risk adjustment programs — the so-called 3Rs — when determining their pricing, says Jim O’Connor, a consulting actuary at Milliman. “Carriers will do relatively well for people with some conditions,” he tells HEX. While the temporary risk-corridor program is outside of the pricing formula, it might still be considered because it can protect against mispricing by limiting insurers’ losses and gains. Miscalculations May Cost Insurers During a March 7 session at America’s Health Insurance Plans’ (AHIP) Health Insurance Exchanges Forum in Washington, D.C., O’Connor and Carlson explained some of the strategies being used to price products for 2015. Carriers that miscalculated the average age of enrollees for 2014 could see a significant impact on their underwriting margins, which will affect how they price for 2015. In a model illustration where a health plan has 50,000 members, the carrier could expect to collect about $300 million in annual premium, and to spend about $264 million in claims. But if the average age of the enrollees is just two years older than predicted, the premiums collected grow to $316 million, but the medical loss ratio (MLR) increases by about 1.4%. The impact on the underwriting margin would be $2.3 million. “That’s a fairly significant amount considering the very slim margins for health plans,” Carlson told attendees. Moreover, health insurers with enrollment below the level predicted could face additional risk, he added. “Basically, you are collecting premium that is less than the expected cost of the individuals you’re enrolling,” Carlson tells HEX in a subsequent interview. For every individual that you enroll over the age of 55, you are expected to lose money on that person based on the uniform age-rating curve (prior to application of the 3Rs). Unless you have enough younger individuals to make up for that loss, it’s going to drive up your MLR, he explains, because the 3R risk transfer payments will likely be lower. “That is a concern if the risk adjustment system, coupled with the reinsurance, is over-biased for the unhealthy,” O’Connor explains in a telephone interview with HEX. The model, based on more than 300 million member-months, indicates that the 3Rs might go further than expected to mitigate risk, he says. Carriers could see a drastic change in the profitability of certain enrollees once the 3R calculations are applied. Traditionally high-cost populations, such as women of child-bearing age and older adults, become more profitable, while young adult males move from being very profitable to being less profitable or even slightly unprofitable, O’Connor told attendees. “And then as the males age, they become pretty attractive after the 3Rs,” he said. The amount of profits will vary by carrier. According to the latest enrollment data from HHS, 55% of exchange enrollees are female, but 53% of the uninsured population is male. Also under the risk-adjustment program, enrollees who have all but nine of the 127 medical conditions identified by CMS could translate to higher profit margins, O’Connor told attendees. Moreover, when combined with the reinsurance program, people with certain conditions could mean a double payment for carriers, he added. Based on one of Milliman’s illustrative models, the average profit margin for a member with certain medical conditions was about 23%. But the margin for enrollees who didn’t have one of those conditions was between -5% and zero. These results were based upon a specific set of assumptions that will likely differ somewhat from actual results, given the demographic distributions emerging on the exchanges. However, directionally they indicate the importance of the 3Rs to the pricing process, he tells HEX. “The problem is that no one really knows, at this point, the real adjustment they’re going to have…because that depends on the health status of the entire state pool for either individuals or small-group,” O’Connor says. Carriers don’t yet know their own risk profile, nor do they know the state’s overall risk profile. Through the use of self-reported health assessment surveys conducted by the federal government, actuaries have attempted to estimate the risk of enrollees, but the results likely won’t be very reliable. Some carriers will have a better handle on their risk than others, O’Connor tells HEX. A Blues plan, for example, might already have 80% of a state’s individual market, and might have a good understanding of the state’s risk factor for the uninsured. But smaller carriers will have a difficult time estimating the risk. For example, Consumer Operated and Oriented Plans (CO-OPs), which have no enrollment history, will find it very difficult to set rates for 2015, O’Connor says. Some carriers decided to be neutral in terms of risk when setting their 2014 rates and might opt for the same strategy for 2015. But O’Connor says that might not be a wise strategy. Two ‘Rs’ Are Better Than One The reinsurance program, which runs for three years, reimburses carriers for individuals who exceed $45,000 in medical expenses in 2014. The threshold was lowered in November — from $60,000 — after the White House gave states and carriers the option of extending non-ACA-compliant plans (HEX 12/19/13, p. 1). The threshold increases to $70,000 for 2015. Typically carriers have a reduction in their 2014 rates of between 6% and 15% because of the program. But those reductions were based on the original $60,000 threshold. Moreover, because the reinsurance program doesn’t coordinate with the risk-adjustment program, an insurer that has an enrollee with a high-risk profile who winds up with more than $45,000 in medical expenses in 2014 could be reimbursed through both programs for the same claim, O’Connor says. “HHS was aware of this, but thought it would be too complicated to integrate those two programs since the reinsurance program only lasts three years,” he tells HEX. ‘Grandmother’ Plans Factor in Allowing members to renew their non-compliant health plans as late as Oct. 1, 2016, is another factor actuaries need to consider when setting rates. Last month, the Obama administration said state regulators and health plans could determine if people now covered by non-ACA-compliant plans could continue that coverage (HEX 3/6/14, p. 8). There is an expectation that people in need of richer coverage will drop their existing coverage in favor of richer benefits on the exchange, while healthier people will continue with their existing plans — dubbed “grandmother” plans by some — until they’re forced to change. And low-income individuals — who tend to have higher morbidity — will migrate to the exchanges for the subsidies and the more comprehensive benefits, O’Connor says. http://aishealth.com/archive/nhex032014-02?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=36079962

Today's Datapoint

2% … of physicians collected 25% of all Part B payments between 2008 and 2011, according to the HHS Office of Inspector General.

Quote of the Day

The idea that narrow networks or out-of-network practices are being questioned “…is a killer for the hope of price competition…. The move to do that is completely counterproductive to the hope that the exchanges and the markets will help to push down price.” — Mark Rust, office managing partner for the law firm Barnes & Thornburg LLP in Chicago, told AIS’s Health Plan Week.

Tuesday, April 1, 2014


According to a recent report based on nationwide e-mailed surveys, healthcare executives indicated the following responses: • In 2014, 12.35% of respondents indicated they had used locum tenens nurse practitioners in the previous 12 months, up from 4.8% in 2013 • In 2014, 7% of respondents indicated they had used locum tenens physician assistants in the previous 12 months, up from 4.7% in 2013 • In 2013, nurse practitioners and physician assistants accounted for 12% of all temporary days requested at Staff Care, up from 10% in 2012 Source: "2014 Survey of Temporary Physician Staffing Trends," Staff Care, 2014, http://www.staffcare.com/uploadedFiles/2014-survey-of-temp-physicians.pdf