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3 Groups Payers Will Watch Closely in 2013

 |  By jfellows@healthleadersmedia.com  
   January 02, 2013

As health insurers look toward a year that will mark significant change in how they interact with consumers and the federal government, several issues over the Patient Protection and Affordable Care Act remain either unclear or unresolved from 2012.

Age ratings, medical loss ratios, and the sheer number of people looking for coverage, among other things, are still hurdles payers must overcome, though now the timeline to do so is even shorter because health insurance exchanges are due to come online in just 10 months.

There are many groups payers are watching to help make the 2013 healthcare landscape clearer not included on this list, but here are the top three groups whose actions will have the most impact on payers' decisions in the next 12 months.

1.Congress
The U.S. Senate and House waited until the last, the last possible moment before agreeing to avert the fiscal cliff. But its reluctance to forge a permanent solution brought in the New Year with a more of a whimper than of a bang for the healthcare industry.

The Sustainable Growth Rate (SGR) problem was sort of solved. To the relief of physicians, there will be no 26.5% cut to reimbursement rates, but the fix is still temporary. Medicare reimbursement rates for physicians will remain the same only through the end of this year.

The one-year fix will be paid for by other healthcare cuts that include reducing Medicaid Disproportionate Share Hospital (DSH) payments, reimbursement for ESRD patients, and for multiple therapy procedures performed on the same day.

Several groups rushed to issue statements on the so-called "doc fix". President and CEO of the American Hospital Association (AHA), Rich Umbdenstock issued a statement saying, "While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals' ability to care for seniors and their communities. That's why we are very disappointed at the approach taken in this measure. Hospitals are working to provide high-quality, innovative and effective care to seniors in their communities. Additional payment reductions will make it harder for patients to access the care they need and depend on."

MGMA-ACMPE (formerly MGMA) President and CEO Susan Turney, MD, issued a similar statement on the last-minute agreement.  "Although Congress again averted another massive Medicare physician payment cut at the 11th hour, this action only perpetuates another year of uncertainty for physician practices forced to continue their work under the dark cloud of looming SGR cuts and the new threat of sequestration cuts scheduled for March."

"Without action to permanently repeal the sustainable growth rate formula, Congress will replay this fiscally irresponsible scenario again and again, with even larger cuts awaiting practices in the near future. Physician practices need a stable, predictable Medicare payment system to allow them to make sound, long-term decisions to invest in their practices, position themselves for the future, and provide the highest quality care to the Medicare patients they serve."

Congress also still has to deal with the sequestration cuts (postponed by only two months) to Medicare, which reduces the program by $11 billion over the next decade. Why is this important to payers? Health insurance companies use Medicare as a benchmark for their own reimbursement rates.

Another reason payers will be watching Congress in 2013 is to see if it repeals the health insurance premium tax levied against payers to help pay for healthcare reform. America's Health Insurance Plans  points to studies showing the tax, which begins in 2014, will increase premiums. A bill in the U.S. House with 200 co-sponsors went nowhere in 2012, but with a new Congress and the sequestration cuts still in play, it could be a bargaining chip.

2. Centers for Medicare & Medicaid Services
Every healthcare entity has its finger on the pulse of CMS, but in 2013, payers will be looking at the agency even more closely because health insurance exchanges have to be up and running by October.

Late in 2012, CMS issued three significant proposed rules guiding exchanges: essential health benefits, health insurance market and rate review, group wellness. The comment period is closed now despite several groups, including some in Congress, lobbying for an extension.

Health insurers are now waiting for the final rule to be published to see if comments from AHIP and other groups affected any change in the proposals. At issue is the amount payers would have to increase premiums to cover the cost of additional benefits without cost-sharing.

And while payers haven't been silent on the health insurance exchanges, they haven't visibly stepped up as actual participants. Currently, only Aetna has said it plans to participate in 15 health insurance exchanges.

AHIP's stance on exchanges has favored those that are run by states. As of the 2012 deadline for states to declare whether they would enter into a state- or federally run, or partnership exchange, 18 states plus the District of Columbia committed to a state-run health insurance exchange.

CMS is approving the states to move forward with plans fairly quickly. It has until January 31 to tell states if the plans submitted are approved. The next health insurance exchange deadline is February 15. That's the deadline for states to declare whether they intend to enter into a partnership with the federal government on running a health insurance exchange.

3.Other payers
The variance between what the country's largest health insurance companies will cover is fairly small. With Medicare reimbursement rates as the benchmark for coverage decisions, payers first look to the federal agency, then to each other.

Yes, they're competing for their own share of healthcare dollars, but AHIP has illustrated the fine point on the issue that all payers are facing and that is how to cover an influx of new beneficiaries without additional cost sharing and without raising premiums?

The uncertainty hovering over how health insurance exchanges will work once up and running, and how many people will actually participate sets up payers to enter as late arrivals. Consumers, who are also confused about how exchanges will work, are likely waiting for the company name they recognize on their EOB statements to explain it to them.

Jacqueline Fellows is a contributing writer at HealthLeaders Media.

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