Federal lawmakers will likely expand Medicaid enrollment as a way to get some of the estimated 46 million uninsured health insurance coverage.
This is great news for health insurers that already serve Medicaid customers, such as members of the Association of Community Affiliated Plans—a group made up of 45 nonprofit safety-net plans that serve 7 million enrollees.
Insurers that don't have experience in Medicaid are also showing interest in getting involved in the Medicaid managed care world.
They understand Medicaid is a new growth area—along with the individual market, which has grown because of the lousy economic situation that has driven employers to cut health benefits and lay off employees.
There are some concerns for those without Medicaid experience though. Working with the Medicaid population means they need to make special accommodations and consider the barriers those beneficiaries face. The Medicaid population is quite different from those in employer-based plans—and insurers can't expect to offer the same services and plans as those in the traditional employer market.
Here are two common barriers to the Medicaid population getting proper healthcare and how Medicaid managed care insurers are handling the issues.
Housing, income, and transportation issues
Before even starting to deal with a member's health, a Medicaid health plan has to understand the barriers that can impede health.
One barrier is that the Medicaid population's housing situation isn't as predictable as those in employer-based insurance. Low-economic status forces many Medicaid beneficiaries to find new housing and often times they don't leave a forwarding address. Plus, there is no employer involved to help the insurer find the individual.
Tom Kelly, president and CEO of Schaller Anderson, an Aetna-owned Medicaid program serving 11 states, says the company's average Medicaid beneficiary resides in at least two places each year.
"Getting them into the system and getting them to report changes of address can be a difficult thing," says Kelly.
Two ways to deal with this problem is communicate with the new members from the start so the health plan is front of mind; and reach out to providers and community health centers, which often know their patients better than health plans.
Margaret A. Murray, executive director of the Association of Community Affiliated Plans, says CareOregon, a Medicaid managed care plan, works with community health centers to re-engineer practices, such as not requiring Medicaid beneficiaries to make appointments, but allow walk-ins.
Another way is to offer incentive payments to providers that give high-quality services. This will ensure providers are also performing outreach to members.
Another avenue for insurers is to mine claims data to find members' health risks and reach out to those who are at-risk through care management programs.
For instance, claims data may show that a member is getting prenatal vitamins, and the insurer can contact the member to make sure she is getting the proper prenatal services.
With lower income also comes barriers to making doctor appointments. Medicaid plans are capitated for transportation services and insurers new to Medicaid must understand they will have to work with transportation companies in order to help some of their members get the care they need.
"These impediments are a lot more profound than what typically faces employed members or their dependents," says Kelly.
Literacy — health and language
Medicaid beneficiaries often speak other languages and many are not familiar with the healthcare system. Imagine not being able to understand the language and facing the healthcare maze.
Health insurers have the opportunity to educate members and providers about health literacy. AmeriHealth Mercy, a Medicaid managed care plan based in Philadelphia, offers providers a book about health literacy that helps them understand how to communicate with the Medicaid population. Insurers can also provide training for physicians and nurses in community health centers, says Murray.
Insurers in the Medicaid population must also provide bilingual communication through literature, customer service, and care management systems. Kelly says his company recently added member service representatives who speak Arabic and Somali.
"The only way to reach them is to make the connection through language," says Kelly.
But also understand that many Medicaid beneficiaries have limited language and reading skills so insurers need to provide written and oral communications that are understandable in non-clinical and non-technical language, says Kelly.
Schaller Anderson offers a welcome kit to its new members as well as new member calls that help Medicaid beneficiaries understand how to use healthcare services and find primary care physicians.
The company also prepares members for the first doctor appointment, including telling them about Ask Me 3, which is a National Patient Safety Foundation program that suggests patients ask themselves three questions: 1. What is my main problem?; 2. What do I need to do?; and 3. Why is it important for me to do this?
If health reform ultimately expands Medicaid, Kelly predicts language will play an even larger role for insurers. Medicaid members are often mothers who have children who speak the language, but expanding Medicaid will likely bring in more single adults who won't have that benefit.
"Bringing in more adults will probably increase the language challenges because they may not have the support system at home that can help them un-puzzle the language situation," says Kelly.
Health insurers that are not used to the Medicaid population must understand that Medicaid beneficiaries are quite different than the typical employer-based insurance member. Insurers that want to jump into the Medicaid population because they see a growth opportunity, but aren't willing to invest in member services and outreach, won't help their members and could hurt themselves in the long run.
While discussion in the Senate during the past few days has focused on how health insurance premiums will be impacted under the Patient Protection and Affordable Care Act, another area expected to gets its fair share of attention on the Senate floor is how the $848 billion reform bill—through savings and taxes—will be paid for over the next decade.
Here is how the bill would pay for health reform:
Medicare and Medicaid Savings
The Congressional Budget Office (CBO), in its Nov. 18 analysis of the Senate reform bill, estimated that making numerous changes to payment rates related to Medicare, Medicaid, and associated programs, could reduce direct spending by $491 billion over the 2010-2019 period. This would happen by:
Making permanent reductions in annual updates to Medicare’s payment rates for most services in the fee for service sector (other than physicians’ services). This would yield budgetary savings of about $192 billion over 10 years.
Setting payment rates in the Medicare Advantage program on the basis of the average of the bids submitted by Medicare Advantage plans in each market. This could yield savings of about $118 billion over the 10-year period.
To address the concern and criticism of cutting Medicare Advantage, the Senate Finance Committee issued a brief on the topic on Tuesday—saying that the Senate bill cuts down on overpayments—not benefits. It said that the Medicare Payment Advisory Commission (MedPAC) had determined that Medicare was paying approximately $12 billion more annually for beneficiaries enrolled in private Medicare Advantage plans than if they were in traditional Medicare.
Taxes
A number of taxes have been added to the proposed Senate bill. The one receiving the greatest attention has been the so-called "Cadillac" tax that would impose an excise tax on insurers of employer sponsored health plans with aggregate values that exceed $8,500 for individual coverage and $23,000 for family coverage, effective January 2013.
Speaking on the Senate floor about the tax on Tuesday night, Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, said the tax is expected to also cut excessive healthcare spending in the long run.
Other taxes under consideration in the Senate bill are:
Imposing a tax on individuals without qualifying coverage of $750 per year—up to a maximum of three times that amount—to be phased in beginning in 2014.
Increasing the tax on distributions from health savings accounts or an Archer medical savings accounts that are not used for qualified medical expenses to 20% (from 10% for HSAs and from 15% for Archer MSAs) of the disbursed, effective January 1, 2011.
Increasing the threshold for the itemized deductions for unreimbursed medical expenses from 7.5% of adjusted gross income to 10% of adjusted gross income for regular tax purposes, effective January 1, 2013).
Increasing the Medicare Part A (hospital insurance) tax rate on wages by 0.5% (from 1.45% to 1.95%) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly, effective January 1, 2013.
Setting a new $2.3 billion annual fee on the pharmaceutical manufacturing sector, effective for sales after December 31, 2008.
Setting a $2 billion annual fee on the medical device manufacturing sector, effective for sales after December 31, 2008.
Setting a $6.7 billion annual fee on the health insurance sector for net premiums written after December 31, 2008 and third party agreement fees received after December 31, 2008.
Limiting the deductibility of executive and employee compensation to $500,000 per applicable individual for health insurance providers, effective January 1, 2009.
Setting a tax of 5% on the amount paid for cosmetic surgical and medical procedures, effective January 1, 2010.
Many California hospitals may be skirting state laws that require them to disclose prices of procedures when requested by patients, according to a new study by Rand Health.
"Our findings raise questions about the effectiveness of California laws that are designed to help uninsured patients shop for medical care and protect themselves from being charged excessive prices," wrote the author of the paper, Ateev Mehrotra, MD, an assistant professor of medicine at the University of Pittsburgh School of Medicine and a Rand policy analyst.
"Current California legislation fails to meet its objective of enabling uninsured patients to compare prices for hospital-based healthcare services," the authors concluded.
The researchers conducted their study by posing as a fictional, uninsured, low-income patient who sent letters requesting price quotes from 353 acute care hospitals for one of three common elective procedures. However, the authors said they received responses from less than one-third. The procedures were a laparoscopic gallbladder removal, a hysterectomy, and a routine screening colonography.
"Just 28% of the hospitals responded . . . and the responses varied widely in content and price," the authors said in a statement. "Most included a price quote for hospital services only, the remainder included both hospital and physician costs or did not specify what was covered."
Mehrotra wrote in an e-mail yesterday that "the hospitals that did not respond were breaking the law."
Of the 98 responses, 15 did not provide a quote and instead asked for more information, such as the billing code; 55 provided a price estimate for hospital services only; 10 included both physician and hospital services; and 18 did not specify what was covered, the researchers wrote.
Two-thirds of the prices quoted by those hospitals exceeded the median price that Medicare reimburses hospitals for each of these procedures.
Mehrotra said the study is the first peer-reviewed effort to review the state's price transparency law, adding the findings have implications for more than 30 other states that have similar laws requiring hospital price transparency to avoid "price gouging" the uninsured.
Brown University contributed to the report, which is published online in the Journal of General Internal Medicine. Rand Health is a division of the Rand Corp.
Jan Emerson, spokeswoman for the California Hospital Association, heatedly disputes the findings, saying the study "is deeply flawed" because the authors have incorrectly interpreted the law.
"The law is geared to address a specific patient's financial situation and the patient must first apply for the program and provide the hospital with documented evidence of their financial situation," she says "AB 1045 does require hospitals upon request to provide an estimate of costs for a specific procedure or service, but that estimate is based on the hospital's chargemaster.
"Hospitals do not provide estimates based on discounted fees because the discounts are only applicable to patients who meet specific financial criteria," she said.
Emerson adds the study unfairly criticizes hospitals for not including physician fees in their estimates. "But hospitals don't bill for physician services—this is prohibited under state law."
"(The law) requires each hospital to provide upon request a written estimate of the amount the hospital will require an uninsured person to pay for hospital services that are reasonably expected to be provided, based on average length of stay and services provided by the person's diagnosis . . .
"Each hospital is also required to provide information about the hospital's financial assistance and charity care policies to uninsured patients, along with contact information for a hospital representative, to obtain more information about these policies."
The Rand research referenced two laws, AB 1045, which took effect in January 2006, requiring hospitals' written responses to price inquiries, and a second, AB 774, that the study authors said "limits the price estimate for patients earning less than 350% of the federal poverty line."
The researchers did not name the hospitals they believe did not comply with state law.
The authors acknowledged study limitations. Letters were addressed to "To Whom It May Concern," and sent to the billing department, and may have been misdirected. Also, letters were mailed from the San Francisco area, but indicated the patient would be willing to travel "to save some money."
Also, state law does not specify the time in which a hospital must respond.
Possible transparency improvements
The authors suggested several changes to the law that would improve price transparency. The amendment would require:
Each hospital to publicly list a contact person to handle requests.
The state could develop a standard patient information form that would preclude hospitals from asking patients to provide a CPT code, which is not readily available to the patient.
The state could standardize which services need to be included in the price estimate.
The project was launched because of concerns that many hospitals charge uninsured, low-income patients more than they charge private insurers and government payers, and many are fighting related charges in class-action lawsuits.
Other authors of the study included lead author Kate Stockwell Farrell, MD, of the University of Pittsburgh School of Medicine; Leonard J. Finocchio of the California HealthCare Foundation; and Amal N. Rivedi, MD, of the Warren Alpert Medical School of Brown University, Providence, RI.
U.S. health, drug, insurance, and biotech companies should publicly disclose their executive pay packages, say 30 primarily Catholic investor groups in charge of about $100 billion in investment capital. The groups say those executives' pay is so high that it is raising the national cost of healthcare.
Among the 21 publicly traded companies "are many leading opponents of Congressional action on healthcare reform," according to a statement from the Interfaith Center on Corporate Responsibility (ICCR), which filed the resolution.
The ICCR members include Catholic Healthcare East and numerous orders of religious nuns, including the Sisters of Charity, Sisters of the Holy Cross, Sisters of Mercy, Benedictine Sisters and Sisters of St. Francis from various regions of the country, and the Basilian Fathers of Toronto. Two of the groups, the Socially Responsible Investment Coalition of San Antonio and the Midwest Coalition for Responsible Investment, are run by Catholics, but include Protestants and non-Christian investors, says Laura Berry, ICCR executive director.
The groups targeted in the plea for public disclosure are: Aetna, AIG, Allstate, Amerisource Bergen, Amgen, Cardinal Health, Cigna, Coventry Health, General Electric, Humana, Lilly & Co., Lincoln National, McKesson, Medco Health Solutions, Medtronic, Stryker, The Travelers Corporation, 3M, UnitedHealth Group, UNUM Group, and Wellpoint.
The ICCR coalition also asked that these companies disclose the benefit packages they provide to their lowest-paid workers.
Representatives from many of the 21 organizations being asked to disclose the information were asked to comment, but did not respond by deadline.
"Shareholders, the government, citizens, and investors are increasingly concerned about seemingly out of control growth in compensation packages for top executives at U.S. corporations, including those in the health industry," Berry said in a statement.
"When the causes of skyrocketing healthcare costs are examined, this growth in health industry compensation is clearly a factor."
To make matters worse, Berry continued, many employers have shifted a greater share of the overall health costs onto employees and their families, making those workers bear an increasing burden of higher premiums, higher deductibles, and more in out-of-pocket expenses. "These packages often reveal an accelerating pay gap between highest and lowest paid employees," she said.
Capuchin Rev. Michael H. Crosby, coordinator of the Wisconsin, Iowa, Minnesota Coalition for Responsible Investment and a member of ICCR's Health Care Working Group, said, "Pay disparity is an important issue because costs in the market-based health industry have been much higher than other industries. Insurance companies and medical systems companies have been highlighted as among the most aggressive in challenging healthcare reform efforts."
Berry said many other pharmaceutical and other health companies might have been named, but were left off the list because they have agreed to engage in discussions with ICCR about releasing the information and some already have, Berry said. She added that the goal is to raise public awareness about the issue.
"If companies don't comply on a voluntary basis, and aren't able to justify their excessive compensation, ultimately, what can happen is that there can be a regulatory or legislative solution. If companies get in trouble or political winds shift, the democratic process begins to assert itself," she said.
The groups request that these companies provide the following four information points:
1. A comparison of the total compensation package of the company's top executives and that of the company's lowest-paid employees, including healthcare benefits and costs in July 2000, July 2004, and July 2009.
2. An analysis of any changes in relative size of the gap between the two groups and an analysis and rationale justifying any such trend.
3. An evaluation of whether top executive compensation packages (including options, benefits, perks, loans, healthcare, and retirement agreements) would be considered "excessive" and should be modified to be kept within reasonable boundaries.
4. An explanation of comparisons of compensation packages, including healthcare benefits of the highest and lowest paid workers.
Last month, 60 of the 300 members, in a separate action, asked 36 major companies, including Merck, Wal-Mart, McDonald's, AT&T, IBM, and General Electric, to state publicly if the U.S. Chamber of Commerce is speaking for them in its "aggressive campaign to kill efforts to overhaul the U.S. healthcare system."
Senators prepared to cast their first votes on healthcare reform and Democrats increasingly expressed optimism that they would succeed in passing a bill before Christmas, the Washington Post reports. Republicans are targeting key sections of the bill, including the nearly $400 billion in tax increases that would finance the legislation's 10-year, $848 billion cost. GOP lawmakers also are expected to propose significant changes to medical malpractice laws. To manage the expected Democratic amendments, Majority Leader Harry M. Reid and other leaders are urging their colleagues to focus only on top priorities for floor consideration, the Post reports.
Senators appealed to two potent political constituencies in the health reform debate, with Democrats seeking additional medical benefits for women and Republicans vowing to preserve and protect Medicare for older Americans, the New York Times reports. The Democrats' first amendment would require insurers to cover more screenings and preventive care for women, with no co-payments. The first Republican proposal would strip the bill of more than $450 billion of proposed savings in Medicare. The savings would curb the growth of Medicare payments to hospitals, nursing homes, health maintenance organizations, and other providers of care.
Senate Democrats had to delay votes on the first set of amendments to the healthcare bill in the face of stiff Republican opposition, the Los Angeles Times reports. Party leaders, scrambling to pass a bill by Christmas, had hoped to approve a proposal to expand access to mammograms and other preventive services. Instead, lawmakers tussled over the bill's potential impact on Medicare, reports the Times. Democratic leaders propose to offset the cost of expanding insurance coverage to some 31 million people in part by cutting future Medicare payments to hospitals, nursing homes, and other providers.
