Proposed legislation follows the lead of the No Surprises Act to take aim at surprise bills and price gouging from COVID-19 testing.
U.S. Representatives introduced the No Surprises for COVID-19 Tests Act last week to extend free COVID-19 testing while combating associated price gouging and surprise bills.
While Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in 2020 to provide free COVID-19 testing for the public regardless of insurance coverage, some providers are using loopholes to slap patients with surprise bills for tests at unreasonable prices, according to the legislators.
The No Surprises for COVID-19 Tests Act would extend coverage of free testing beyond the public health emergency until December 31, 2023, with insurance companies required to continue providing coverage for related items and services without any cost-sharing such as health provider office visits, urgent care visits, and emergency room visits resulting in a COVID-19 test. The bill would also strike a provision of the CARES Act that allows providers to bill at whatever cash price they choose, causing price gouging of tests.
"Congress passed the Families First Coronavirus Response Act to ensure that everyone would have access to free and widely available COVID-19 testing," Frank Pallone, chairperson of the Energy and Commerce Committee, said in a statement.
"Unfortunately, some test providers are exploiting unintended loopholes in the system to unfairly price gouge and wrongfully bill patients for tests that should be free. The No Surprises for COVID-19 Tests Act will close these loopholes and ensure that Americans do not receive surprise medical bills for doing their part to stop the spread of COVID-19. Congress must act on this commonsense legislation soon," he added.
The legislation follows the No Surprises Act, which was signed in 2020 and took effect on January 1 to protect patients from surprise bills after receiving care. As support grows against unfair billing practices, the No Surprises for COVID-19 Tests Act appears to be a natural next step for Congress to take while the pandemic continues.
"One of the most critical steps Congress took at the onset of the pandemic was providing Americans with free COVID-19 testing and vaccinations. We must provide consumers with the certainty that this protection will remain in effect in the months ahead," said Robert Scott, chairperson of the Education and Labor Committee. "The last thing families need during this ongoing public health emergency is an unexpected medical bill for a COVID-19 test. This legislation will help ensure that all Americans can continue to access no-cost COVID-19 testing and slow the spread of COVID-19."
"I decided to join Clover because of where they sit in the healthcare ecosystem," Wai told HealthLeaders. "Leading a team building its own proprietary tech stack within an insurer allows us to prioritize developing functionality that makes the product more useful to physicians. At the end of the day, helping doctors practice more effectively and efficiently, by definition, means healthier patients.
"Additionally, Clover's unique position as a technology company and insurer has allowed it to build a data feedback loop to fuel consistent product iteration in close collaboration with its users – healthcare providers. I believe this gives Clover a significant advantage over so many others in the market and is part of why I'm so excited about the opportunity,” added Wai.
“With this new chapter of my career, I welcome the challenge to develop truly transformational technology that positively impacts the lives of hundreds of thousands of Americans today, and what I believe could be millions more in the future."
Before making the move to Clover, a company focused on healthcare plans for seniors, Wai oversaw functions such as product management, design, data analytics, and growth as senior vice president of product for Hinge Health. He has also held leadership positions at Yahoo and Google and began his career in venture capital, consulting, and engineering after earning a bachelor’s and master’s degree in computer science from Stanford University.
"Conrad is a world-class technologist and will take the lead on day-to-day Clover Assistant product development, engineering, and deployment," said Toy. "His background in driving success through constant product iteration at large technology organizations, combined with his healthcare background, makes him a perfect fit for realizing the full potential of the Clover Assistant."
Vidant Health is being accused of unfair billing and debt collection schemes after charging a patient 11 times the Medicare rate for a CT scan in 2018.
One of North Carolina's largest hospital systems is the target of a lawsuit alleging deceptive billing and debt collection methods.
George Cansler is accusing the 1,477-bed system Vidant Health of not informing him of how much his care would cost, as well as deploying FirstPoint Collection Resources for aggressive debt collection practices on the unpaid bills.
According to the lawsuit, Cansler visited the Vidant Chowan Hospital emergency room in Edenton, North Carolina in 2018 for extreme pain from a likely kidney stone. More than a year later, he received a bill from Vidant asking him to pay $3,119 for a CT scan, 11 times the Medicare rate for the procedure at the time.
Cansler also alleges he was not told of the price beforehand and that Vidant later falsely told him it was a violation of federal law for them to disclose prices to patients before care.
While Vidant's alleged actions predate the No Surprises Act, this is in direct opposition to the federal law which took effect January 1 and prevents healthcare organizations from springing surprise medical bills on patients. For people covered under group and individual health plans, the new protections deal with most emergency and non-emergency services from out-of-network providers at in-network facilities, while those who are uninsured or opt for self-pay will receive a good faith estimate that provides the cost of care up front.
Even so, Vidant’s practices were manipulative and highly unreasonable, according to Cansler and his attorneys.
"Surprise billing is a widely criticized, predatory practice and it is especially harmful when one hospital system is the monopoly provider in a region because patients have no alternatives for care," Jamie Crooks of the law firm Fairmark Partners, LLP, said in a statement. "This complaint alleges that Vidant has abused its monopoly by sending surprise bills demanding unreasonable prices for common procedures."
Cansler's lawsuit is asking the court to require Vidant to reimburse residents who were overbilled and put an end to their alleged surprise billing and debt collection practices.
The 2021 CAQH Index observed a savings opportunity of $1.7 billion annually for fully electronic claim submissions and a 60% increase in number of medical claim payments.
The cost savings opportunity for fully electronic claim submissions in the medical industry more than tripled in 2021, while claim payments boomed in volume as the benefit of automation remained apparent, according to the 2021 Council for Affordable Quality Healthcare Inc. (CAQH) Index.
The ripple effects of the COVID-19 pandemic were far-reaching and greatly impacted healthcare administrative transactions, which dealt with a rise in total spend in the past year, further highlighting the need for adoption of fully electronic processes across the board. The Index measured adoption, volume, and cost savings in the various transactions in 2021 and found an opportunity to save $1.7 billion on claim submissions with electronic methods—a massive leap from the $522 million reported for the previous year.
Though automation adoption for claim submissions remained highest of the transactions analyzed (97%), spending ballooned by 10% and accounted for $6.1 billion of the total annual medical spend, trailing only eligibility and benefit verification. As providers poured more time and resources into manual transactions to submit new information for telehealth or engage with health plans, spending on claim submissions increased.
With manual provider volume and cost per transaction going up and electronic costs declining, the result was a money savings opportunity of $1.7 billion and a time savings opportunity of six minutes on average per transaction.
On the claim payments side, lower utilization in the early months of the pandemic caused providers to settle past due payments, especially claims that were unresolved before COVID-19, according to the Index. This contributed to a 60% increase in total volume, which opposed the other transactions in the report.
Providers sought to be paid more quickly through electronic means and billed more regularly for telemedicine visits to help counteract the loss of revenue from the early stages of the pandemic, the research states, resulting in an increase in payment transaction costs for providers. The jump in volume and provider costs resulted in an 89% percent surge in spend to $2.2 billion.
According to the Index, the cost savings opportunity for claim payments switching from manual to fully electronic was $577 million, a 35% increase from $426 million in 2020. The time savings opportunity, meanwhile, was four minutes on average per transaction.
The findings add to the evidence backing automation adoption across all administrative transactions in the medical industry.
"After an extraordinarily challenging two years in healthcare, the industry's progress toward automated and efficient administrative processes is encouraging," said April Todd, CAQH senior vice president, CORE and Explorations, in a press release. "Our experience during the pandemic has also highlighted future opportunities for savings through automation."
Payers surveyed in Moody's earnings quarterly report managed 2.6% EBITDA growth in 2021, a drop-off from both estimates and figures in recent years.
Insurers experienced minimal growth in 2021 due in large part to the Delta and Omicron COVID-19 variants, according to new analysis from Moody's Investors Service.
Among the surveyed group of publicly traded payers, [[{"fid":"12154","view_mode":"default","fields":{"format":"default"},"link_text":"the earnings quarterly report","type":"media","field_deltas":{"1":{"format":"default"}},"attributes":{"class":"file-default media-element","data-delta":"1"}}]] found the EBITDA growth for this past year to be 2.6%—below the expected range of mid-to-upper single digits and short of the growth in recent years.
Though the individual market saw 2.8 million people sign up after the Biden administration implemented a special enrollment period for The Affordable Care Act (ACA) from February 15 to August 15 and passed increased subsidies, the flip side for insurers was adverse selection.
"But in a throwback to the early days of the ACA, it also led to significant adverse selection, which caused performance to decline," the analysts said. "The insurers have responded with pricing actions and product redesign, which could lead to lower enrollment but better performance."
Growth in Medicare Advantage (MA) counterbalanced some of the negative effects related to the ACA, as enrollment increased to 14% for the payers surveyed. Medicaid also benefited from the suspension of eligibility redeterminations until the expiration of the public health emergency, rising 14.3% in enrollment.
Aetna suffered the biggest drop-off of the insurers analyzed, as their EBITDA of $5.3 billion for 2021 was 17.5% lower than the previous year. Aside from Cigna, which also experienced a decrease of 1.9%, Anthem (8.7%), Centene (2.8%), Humana (1.2%), Molina (15.5%), and UnitedHealth (7.0%) all saw an increase in EBITDA to varying degrees.
After navigating the challenges of 2021, payers are expected to benefit from the shifting landscape as "growth will likely accelerate to the low double digits" for 2022, according to the report. As COVID costs lower and the individual market performs better, insurers should receive a bump.
"For 2022, earnings growth is likely to pick up, based on improved performance in the individual market, better commercial enrollment trends in line with projected economic growth, and continued growth in [MA], offset by declining Medicaid enrollment once eligibility redeterminations resume, which is likely to happen midway through the year," the analysts said.
Following the COVID-19 surge and its burden on the U.S. healthcare system, providers and health plans have worked together to conduct administrative functions more efficiently, particularly remotely. The result, the Index observed, is an increase in automation of transactions, with prior authorization seeing one of the most significant improvements, jumping from 21% in 2020 to 26% this past year.
Researchers also found that despite spending associated with prior authorizations decreasing 11% to $686 million due to decrease in volume and increase in automation, the cost savings opportunity from switching to electronic methods increased to $437 million annually, from $417 million in 2020.
The increase in automation, however, doesn't just save money, but time as well. According to the Index, providers saved, on average, 16 minutes per transaction by conducting prior authorizations electronically.
Finding ways to cut down on money and time spent on prior authorization should be a priority, as the process is often considered an administrative hindrance and one of the most costly and time-consuming transactions to conduct among those studied, according to the Index. To alleviate the stress on staff and streamline care for patients during the pandemic, prior authorization requirements were even suspended or waived, which researchers found contributed to a 23% decrease in prior authorization volume.
"The 2021 CAQH Index uncovered important shifts in healthcare administrative operations during the pandemic, some of which could have lasting implications," said April Todd, CAQH senior vice president, CORE and Explorations, in a press release. "Social distancing, remote work and an increase in the use of telemedicine have resulted in greater levels of automation today and additional opportunities for savings in the future."
The Lown Institute finds a significant discrepancy between wages of nonprofit hospital CEOs and their staff without advanced degrees, raising questions on compensation for healthcare executives.
Nonprofit hospital CEOs are compensated, on average, eight times more than their hourly workers, according to a recent study of more than 1,000 hospitals.
Researchers from Lown Institute conducted the analysis on pay equity, publishing their results in Health Affairs, and found a large chasm between top-level executives and their staff, raising questions about how hospital CEOs should be paid.
The COVID-19 pandemic has, among other things, brough to light the compensation of frontline workers in the healthcare industry, and in particular, their wages relative to the top decision-makers at hospitals.
Lown Institute researchers examined the difference by comparing the average pay of CEOs with the wages of their employees without advanced degrees, such as janitorial workers. Physicians and nurses, along with other professional staff requiring specialized degrees, were excluded from the study. The researchers focused on the 2018 compensation data of 1,097 hospitals.
The gap in pay equity varied significantly, with some CEOs paid twice as much as the average worker, while on the extreme end the highest-paid executive made 60 times more.
Backing up previous research that higher compensation is correlated to hospital size (number of beds), the study found that the bigger the hospital, the more that CEOs were paid. While the average hourly worker wage also increased in larger hospitals, it didn't come close to the exponential nature of CEO compensation. In hospitals with 99 beds or fewer, CEOs earned six times as much, which shot up to 14 times as much in hospitals with more than 400 beds.
Along with hospital size, urban location and teaching status also dictate CEO wages, according to the study. CEOs made 14 times as much as their workers in major teaching hospitals, compared to nine times as much at minor teaching hospitals and seven times as much in non-teaching hospitals. CEOs in urban hospitals took home nine times the pay compared to six times the wage of workers in rural hospitals.
However, the researchers also found unexplained discrepancies in compensation by hospital size, location, and type. In some cities, CEOs received two to four times the hourly rate other hospitals do, despite their workers being paid similar or lower rates.
Ultimately, the researchers conclude that the rise in CEO compensation in the nonprofit healthcare industry mirrors the corporate world and big business. But with the pandemic providing an opportunity to rethink what constitutes the value of hospital executives, size and type should be secondary factors, not determiners.
"As a society, we need to develop a set of factors that gives CEOs incentives to fulfill the hospital’s social mission," the researchers wrote. "For example, CEOs could be rewarded for improving clinical outcomes, patient safety, and racial health disparities. They could be rewarded for being good stewards of public monies by improving cost efficiency. The complexity of the job should also be considered, not only based on the size of the hospital or system but also the hospital's patient mix and financial cushion.
"Currently, hospitals with a wealthier and well-insured patient mix tend to pay their executives the most, although arguably hospitals that care for more publicly insured or uninsured patients and have chronically thin margins require more skill to manage successfully."
