Research by the American Medical Association (AMA) finds 15 states reported double-digit percentage increases in premiums in 2022.
Physicians are facing higher medical liability insurance costs for the fourth year in a row, according to analysis by the AMA.
The report, based on an annual survey of professional liability insurers conducted by the Medical Liability Monitor (MLM), found that the proportion of premiums with increases in 2022 was 36.2%, the highest rate in any year since 2005. The average premium increase for 2022 was 8.1%.
The prevalence of year-to-year increases in medical liability premiums from 2019 to 2022 has not been observed since the early 2000s, AMA stated.
"There is a growing consensus that a hard medical liability insurance market exists in a considerable number of states and is slowly spreading across the U.S. as more physicians face higher insurance premiums," AMA president Jack Resneck Jr. said in a statement. "For physicians who can still obtain coverage in a hard market, the skyrocketing costs may force physicians to relocate away from certain high-cost states or drop certain critical services that raise their liability risk. These tough choices can lead to reduced access to care for patients."
After medical liability premiums were mostly stable between 2013 and 2018, the upward trend began in 2019 when the proportion of premiums that increased was almost double from the year before, rising from 13.7% to 26.5%. The proportion of premiums that increased went up again in 2020 to 31.1% before taking a slight dip in 2021 to 29.5%.
Double-digit percentage increases in premiums were reported in 15 states in 2022, up from 12 in 2021. Illinois once again had the largest proportion of premiums that increased by double digits (63.6%), followed by New Mexico (33.3%), Oregon (26.7%), Kansas (20%), South Dakota (20%), Kentucky (20%), Massachusetts (16.7%), Montana (16.7%), Maine (6.7%), Virginia (6.4%), Nevada (5.6%), and Georgia (4.8%). Premium increases varied in these states from 10% in Maine and Montana to 40.9% in Kansas.
The analysis also found a wide variation in premiums depending on geography in 2022. For example, OB/GYNs dealt with premiums ranging from $49,804 in Los Angeles County, California, to $226,224 in Miami-Dade County, Florida.
As AMA noted in their analysis last year, the current rise in medical liability premiums is not as severe as the last "hard market" that took place in the early 2000s. The report highlights that two differences compared to the last hard market are that the medical professional liability (MPL) insurance industry is in a much better financial position now and that there is currently a smaller MPL market on the demand side.
"Nonetheless if current trends continue, even if slower and less severe than the last hard market, this medical liability pressure could have detrimental effects on health care markets, such as an increase in defensive medicine, lower physician supply, and thus reduced access to care," the analysis concluded.
New research by Turquoise Health examines the state of price transparency for both hospitals and insurers.
"Price transparency has passed a major inflection point" with there now being no shortage of pricing data by both payers and providers, Turquoise Health CEO Chris Severn said in the company's Q1 impact report.
The analysis finds that as of March 2023, 95% of commercially insured lives are now represented by payer data, while 84% of hospitals have posted pricing data. Additionally, Turquoise scored payers on transparency for all payer machine-readable files based on completeness, size, and parsability.
On the payer side, the report notes that pricing data has come in a lot quicker after the insurer price transparency law went into effect in July 2022 than it did for hospitals following their regulation more than two years ago. And the numbers continue to rise, with Turquoise citing 183 payers publishing data as of March, up from 68 in July 2022, 111 in October 2022, and 170 in January 2023.
However, the report highlights that "healthcare pricing is complex" and that the size of payer data requires refinement and necessary context.
"If the government is aiming to require all insurance companies to publish the rates for all items and services, which we at Turquoise fully support, the output will, by nature, be nuanced and quite large," Turquoise stated.
"Due to this unfortunate truth, the data still requires industry expertise and additional reference data to process and create utility for end users. When left in the hands of the inexperienced, as we’ve seen in some articles from industry outsiders, incorrect and hasty conclusions are drawn."
That is less the case with provider pricing data, which now has 5,383 hospitals out of 6,394 (84%) with machine-readable files and 4,703 (73.6%) with significant negotiated rates. Those figures are up from Turquoise's first impact report released in October 2022, when 4,909 hospitals (76%) had posted a machine-readable file and 4,195 (65%) had negotiated rates.
The rise in compliance will "usher in a transformational era where data will be embedded in revenue cycle workflows, contract negotiations, and become an integral part of running a savvy healthcare organization," Turquoise said.
Severn recently shared some price transparency tips for revenue cycle leaders in an exclusive interview with Healthleaders.
"Make sure that you have a good understanding of the laws and requirements," Severn said. "There are a lot of resources out there that can help you get educated and understand where you and your organization can best focus your time.
"Also, keep an eye on the landscape for information. We’re seeing guidance, training, podcasts, and notice of any changes, such as a recent job aid to assist payers and providers with their Independent Dispute Resolution applications, published nearly weekly."
Severn also gave congressional testimony at the March 28th hearing "Lowering Unaffordable Costs: Examining Transparency and Competition in Healthcare," where he spoke for more government action, including the enforcement of standards.
The payer giant posted $91.9 billion in revenue for the first quarter of 2023, up 15% year-over-year.
The nation's largest Medicare Advantage (MA) insurer doesn't expect its growth in the sector to slow down amid risk adjustment changes.
UnitedHealth Group CEO Andrew Witty affirmed the payer's outlook in an investor callon the same day the company announced significant gains in its first quarter earnings report.
Witty acknowledged CMS' final decision to phase in the risk adjustment changes over the next three years gives UnitedHealth Group time to adjust, both as a business and for its beneficiaries. CMS said MA plans will see an average payment increase of 3..32% due to the phase-in, instead of the 1.03% in the advance notice.
"While we remain concerned about some of the potential unintended consequences of the changes of the risk adjustment model, particularly around adequate diagnosis and support for people with diabetes, complex behavioral needs and more, we do appreciate CMS' decision to phase-in the changes," Witty said.
MA experienced record enrollment for the 2023 plan year and UnitedHealth Group accounted for nearly two in three new enrollees (44%) by for-profit insurers, according to analysis by The Chartis Group.
UnitedHealthcare CEO Brian Thompson said the payer feels good about its market position and intends to grow again in 2024.
"We expect the marketplace to continue to grow in 2024. And we continue to lead with the strong momentum that we have demonstrated for many years now," Thompson said. "So, we are obviously in the middle of our benefit planning, but I can just share with you that we are encouraged and optimistic."
For the first quarter of 2023, UnitedHealth Group raked in $91.9 billion to achieve 15% year-over-year growth over the $80.1 billion from 2022, the company's earnings report stated.
The strong performance was driven by double-digit growth by both its health services business Optum and its insurer arm UnitedHealthcare.
Optum's first quarter revenues shot up 25% to $54.1 billion, while operating earnings climbed 19% to $3.7 billion.
For UnitedHealthcare, revenue increased 13% to $70.5 billion and operating earnings grew 14% to $4.3 billion.
The payer's MA member base, meanwhile, increased from 6.9 million to 7.5 million year over year.
A study reveals an increased interest among executives to work with third-party partners to support their revenue cycle management.
In large part due to the workforce shortage in the wake of the pandemic, most providers plan to outsource revenue cycle functions, according to a study by CWH Advisors.
The consulting firm surveyed 38 hospital and medical group executives in November and December 2022 to gauge interest in the use of third-party partners going forward.
More than six in 10 respondents (61%) said they expect to make greater use of third parties for offering patient financing options in the next two years, with 63% indicating they were dealing with staffing shortages in their revenue cycle departments.
Only 42% of respondents said they are satisfied with their current patient payment solutions. Improving check-in and payment capabilities are high on the list of areas of improvement for providers in order to offer patients a more retail-like experience, the survey stated.
"We designed this study to get providers' point of view on their patient payment needs, to better understand how technology supports payments processes, and to learn more about how the procurement of those services occurs," David Stievater, partner at CWH Advisors, said in a press release.
"Overall, our research found that providers work hard to balance their financial goals of accelerating cash flow and reducing debt with offering excellent service and flexible payment options to patients."
Kaufman Hall's 2022 State of Healthcare Performance Improvement report found that revenue cycle is the most common area for outsourcing among hospital leaders. Of the 86 hospital and health system leaders surveyed for the report, 27% said they've pursed outsourcing revenue cycle functions, which was ahead of other solutions like environmental services (23%) and IT services (21%).
Nearly two-thirds (65%), of medical billing companies have a positive outlook on the sourced billing industry, according to another report by Tebra. Forty three percent of respondents also said they view outsourcing as a significant opportunity, while 42% see significant opportunities to expand services.
Over 35% of surveyed health plans said they used more than 10 outcomes-based contracts (OBCs) in the plan year 2022.
The majority of payers used OBC for prescription drugs in 2022, according to a survey by Avalere.
The healthcare consulting firm surveyed 46 U.S.-based health plans from February 14 to February 20, 2023, to gauge their use and experience with OBCs during the 2022 plan year.
Answers revealed that 58% of plans had at least one OBC, while about 10% had two to five contracts, another 10% had five to 10 contracts, and over 35% had more than 10 contracts. Around 15% of respondents said they had no contracts, but are in negotiations for one or more now.
Usage was modestly higher than in 2021, when Avalere found that 56% of payers had an OBC. That year, 12% of plans reported having more than 10 OBCs, which was double the mark from 2020. With that number almost tripling in 2022, the trend shows payers are becoming more willing to utilize the value-based approach.
When asked why they are currently using OBCs, respondents said they were for new products mostly, as well as some existing products, "reflecting growing interest among stakeholders to align payment with clinical benefit, particularly for new products that have limited real-world clinical benefit."
The top three therapeutic areas in which payers utilized OBCs in 2022 were oncology, cardiology, and endocrinology.
Additionally, 74% of respondents with at least one OBC said they prefer contracts with both claims-based and clinical outcomes. Yet, 53% indicated they do not feel claims-based outcomes are a good proxy for clinical benefit.
"Claims-based measures are typically easier to track because they leverage information that plans and PBMs are already gathering, rather than clinical outcomes that may need to be tracked specifically for an OBC," the researchers wrote.
"Clinical measures can be more difficult to track if they require new data infrastructure and pose an additional administrative burden on providers and other stakeholders. Therefore, while clinical outcomes may better reflect clinical benefit, claims-based outcomes are more practical."
The survey notes that lack of consensus on which metrics of value are meaning measures of clinical benefit is one of the barriers to value-based care.
The changes aim to provide consistent access to medically-necessary care while reducing delays for beneficiaries.
Prior authorization policies in CMS' Medicare Advantage (MA) final rule have garnered widespread support from medical and payer groups for streamlining the administrative process.
As part of the rule, prior authorization approvals are required to remain valid for as long as medically necessary, while denials of coverage based on medical necessity must be reviewed by healthcare professionals with relevant expertise before a denial can be issued. MA plans are also required to annually review utilization management policies.
Additionally, the rule requires that coordinated care plan prior authorization policies may only be used to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary, according to the fact sheet released by CMS. Coordinated care plans must also provide a minimum 90-day transition period when an enrollee underdoing treatment switches to a new MA plan, during which the new MA plan cannot require prior authorization for the active course of treatment.
Here’s how groups reacted to the prior authorization changes in the rule:
American Hospital Association (AHA)
"Hospitals and health systems have raised the alarm that beneficiaries enrolled in some Medicare Advantage plans are routinely experiencing inappropriate delays and denials for coverage of medically necessary care," said Ashley Thompson, AHA senior vice president of public policy analysis and development. "This rule will go a long way in protecting patients and ensuring timely access to care, as well as reducing inappropriate administrative burden on an already strained health care workforce."
American Medical Association (AMA)
"The AMA applauds CMS Administrator Brooks-LaSure for leading the effort to include provisions in this final rule that will ensure greater continuity of care, improve the clinical validity of coverage criteria, increase transparency of health plans' prior authorization processes, and reduce care disruptions due to prior authorization requirements," said Jack Resneck Jr., AMA president. "The AMA has long advocated for such meaningful prior authorization reforms and Medicare Advantage enrollees will benefit from the important new protections."
Medical Group Management Association (MGMA)
"MGMA supports today's action by CMS to finalize its proposals to reign in detrimental prior authorization practices, thereby strengthening the Medicare Advantage (MA) program," said Anders Gilberg, MGMA senior vice president of government affairs. "We are thankful that the agency heeded our call to finalize the continuity of care provision, limiting dangerous disruptions and delays to necessary patient care."
Better Medicare Alliance
"CMS' final policy rule for 2024 will support Medicare Advantage's efforts in bridging the health equity gap and providing high-quality care," said Mary Beth Donahue, president and CEO of Better Medicare Alliance. "Further, we support provisions to streamline the prior authorization process to ensure timely access to care as well as steps to ensure transparency and accountability within Medicare Advantage."
The legislation aims to reduce overpayments to Medicare Advantage (MA) plans.
A pair of U.S. Senators have put forth a bill to oppose upcoding in MA by eliminating incentives for plans to overcharge.
The No Unreasonable Payments, Coding, or Diagnoses for the Elderly Act, or No UPCODE Act, has been introduced by senators Bill Cassidy (R-La.) and Sen. Jeff Merkley (D-Ore.) in the midst of MA plans taking heat for receiving billions of dollars in overpayments.
CMS has released its Medicare Advantage Risk Adjustment Data Validation final rule to claw back those overpayments, but the rule will only apply to audit findings beginning with the payment year 2018.
"Federal audits have found that taxpayers have been overpaying bad actors running Medicare Advantage plans by billions of dollars every year, threatening the stability of both Medicare Advantage and traditional Medicare," Merkley said in a statement. "This fraud has to end."
The No UPCODE Act strives to fight that fraud by:
Switching to a risk-adjustment model that uses two years of diagnostic data instead of just one.
Restricting the use of old or unrelated medical conditions to determine cost of care.
Ensuring Medicare is only charged for relevant treatment.
Closing the gap between how patients are assessed under MA and traditional Medicare.
With MA growing at record rates, it's vital MA plans are kept in check so beneficiaries and taxpayers aren't negatively affected.
"Medicare is going insolvent in four years," Cassidy said. "The challenge is preserving that which is good while squeezing out waste. This bill is a step in that direction."
Performance was higher in Medicare Advantage (MA) health maintenance organizations (HMOs) and preferred provider organizations (PPOs).
Enrollees utilize Medicare Advantage at a lower rate than traditional Medicare, but the former has higher clinical quality performance, according to a study published in Health Affairs.
In a comparison of quality and utilization measures in MA and traditional Medicare in 2010 and 2017, researchers found clinical quality performance was higher in MA HMOs and PPOs in nearly all measures in both years.
Clinical quality performance was based on CMS Healthcare Effectiveness Data and Information Set (HEDIS) measures.
MA HMOs outperformed traditional Medicare in all nine measures in both years, aside from osteoporosis in 2010. In 2017, MA HMOs improved on nearly all seven measures and outperformed traditional Medicare on five of them.
MA PPOs, meanwhile, either kept pace or outpaced traditional Medicare on all but one patient-reported quality measure in both years.
In terms of utilization, MA HMOs experienced 30% fewer emergency department visits, approximately 10% fewer elective hip and knee replacements, and almost 30% fewer back surgeries than traditional Medicare in 2017. The differences were less noticeable with MA PPOs, but the utilization trends held true.
As MA continues to grow at a rapid pace, adding a record 2.7 million members this year, it is notable that the study suggests MA does deliver higher quality of care.
However, MA plans have been under scrutiny for receiving billions of dollars in overpayments, in large part due to incentivized upcoding. CMS has released its Medicare Advantage Risk Adjustment Data Validation final rule to recoup the overpayments, which payer groups claim will have the unintended effect of harming patients.
The study concluded: "As policymakers consider alternatives to address potential overpayments in Medicare Advantage, they should also consider the evidence that MA plans provide fewer services while also achieving equal or better quality performance relative to traditional Medicare on a broad array of measures."
A report examines changes in marketplace premiums and insurer participation between 2022 and 2023.
Health insurer competition, as well as economic growth and inflationary pressures, contributed to the Affordable Care Act (ACA) benchmark premium rising 3.4% in 2023, according to analysis by the Urban Institute.
The research, which looks at data from Healthcare.gov and state-based marketplace websites, analyzed marketplace premiums and insurer participation in each state and tracked changes between 2022 and 2023.
After average annual premium reductions of 2.2% from 2019 to 2022, the report found that the marketplace benchmark premium increased nationally by an average of 3.4% in 2023.
The increase is likely due to the strong economy and rising inflation, with the latter contributing to labor costs in the healthcare industry, the researchers stated.
"There may also be expectations that the risk pool will improve following the end of the COVID-19 public health emergency," the report said. "Individuals losing Medicaid and becoming eligible for Marketplace coverage are likely to be low-income workers and healthier than those who remain unemployed or out of the labor force."
The variation in premiums across states is also attributable to insurer competition, with premiums lower in areas with a large number of insurers.
In the report, 12 states had monthly benchmarks above $500: Alabama, Alaska, Connecticut, Delaware, Louisiana, Nebraska, New York, North Carolina, South Dakota, Vermont, West Virginia, and Wyoming. Many of these states have one or two insurers in most rating regions and higher concentration of hospitals.
Meanwhile, 10 states had premiums below $400: Colorado, Indiana, Maryland, Michigan, Minnesota, Nevada, new Hampshire, Rhode Island, Virginia, and Washington. Most of these states have strong competition, a Medicaid insurer, or both.
The analysis revealed that for 2023, if only one insurer was in the market, premiums were higher by $128 relative to a market with five or more insurers. When there were two insurers in the market, the benchmark premiums were higher by $119.
"Premiums have been kept low in part because insurers have developed narrow network plans with providers willing to accept lower payment rates," the researchers wrote. "Narrow networks are not necessarily a problem. But the looming issue is whether the low premiums that have been achieved are also associated with provider networks that are in some ways inadequate."
Lastly, the report examined changes in insurer participation and found that the number of payers grew from 227 in 2022 to 232 in 2023. The modest rise came after a large growth between 2020 and 2022, when insurers expanded from 185 to 227.
Researchers posited if introducing a public option plan into the marketplace would significantly affect premiums. While a public option wouldn't change much in markets with relatively low premiums because most of the feasible savings are already captured, it could theoretically bring down benchmark premiums in markets with little competition, they said.
"But the public option is likely to face the same problems existing insurers face. That is, it is difficult to negotiate provider payment rates because the number of providers is limited," the researchers concluded. "The risk of providers refusing to participate is great and the political power of these providers is considerable."
Understanding negotiated rates between insurers and providers is easier said than done due to the sheer volume of data.
Price transparency regulations have the potential to aid the shift to value-based care, but parsing the data currently available remains a challenge.
Uncovering total cost of care not only benefits patients, but it allows providers and payers to negotiate with one another based on the volume and quality of care delivered.
However, price transparency compliance continues to lag on the hospital side, with a recent report by PatientRightsAdvocate.org finding that 75.5% of hospitals are still not adhering to the rule.
On the payer side, there's been no shortage of data since the law went into effect on July 1, 2022, with Turquoise Health recently reporting that it amassed 630 terabytes of insurer price transparency data. Despite the overwhelming volume, payers have yet to figure out the best way to display all that information, as payer-machine readable files have varied 50-100 times in size, according to Turquoise Health.
In a previous interview with HealthLeaders, Turquoise Health CEO Chris Severn spoke to the price transparency rules' long-term impact on the healthcare system, when done right.
Severn said: "As the adoption of the current rules and laws continues to increase, we believe that data will inspire positive changes, such as transparent contracting and less variability in pricing. Both of those would in turn help move the needle closer to fair prices of services, but those positive effects take time."
To make sense of the data that is available right now, companies like Turquoise Health are developing platformsthat allow for the comparison of providers, payers, and costs of services.
Trilliant Health has released its own health plan price transparency analytics tool that can shed light on negotiated rates for services rendered, the company announced.
Ultimately, Trilliant CEO Hal Andrews said, "health plan price transparency data will enable value-based competition, revealing the best value for any service in any market under fee-for-service arrangements."
