The pandemic continues to effect rebates, even if this year's figure pales in comparison to 2020 and 2021.
Payers will have to fork over about $1.1 billion in medical loss ratio (MLR) rebates across all commercial markets in 2023, according to Kaiser Family Foundation (KFF) research.
Under the MLR provision of the Affordable Care Act, insurers in the individual and small group markets must spend at least 80% of their premium income on healthcare claims and quality improvement efforts, with the remaining 20% going to administration, marketing expenses, and profit. For large group payers, the MLR threshold is 85%.
Insurers that do not meet the MLR threshold are required to pay back excess profits or margins through rebates to their beneficiaries.
Using preliminary data reported by insurers to state regulators and compiled by Mark Farrah Associates, KFF found that payers estimate they will issue over a billion dollars in rebates across commercial markets, $500 million in the individual market, $330 million in the small group market, and $250 million in the large group market.
The $1.1 billion in rebates for this year is larger than those issued in most previous years, but is well short of the record-high rebates of $2.5 billion in 2020 and $2 billion in 2021 due to the early stages of the pandemic.
The pandemic continues to influence this year's figure as MLR rebates are based on a three-year average, meaning 2023 will be calculated using payer financial data in 2020, 2021, and 2022. In 2020, cancelled elective care and individuals choosing to forego routine care resulted in health spending and utilization going down, KFF stated.
Payers had already set their 2020 premiums before the pandemic, which led to many being over-priced relative to the amount of care beneficiaries utilized.
"Another year of higher loss ratios in the individual market may foretell further premium increases in 2024, as some insurers will aim for lower loss ratios to regain higher margins," researchers wrote. "In recent years, insurers in all markets had experienced a great deal of uncertainty in setting premiums during the pandemic. Looking ahead to 2024, some of that uncertainty may continue, specifically relating to pent-up demand or the health effects of missed and delayed care."
Research into utilization and spending for need-based subgroups suggests integration of the two programs could better serve enrollees.
There is a need for integration strategies combining both Medicare and Medicaid benefits due to significant use of both payers among need-based subgroups of dual-eligible beneficiaries, according to a study published in JAMA Health Forum.
Due to their complex care needs, dual-eligible beneficiaries account for a disproportionate share of spending and the lack of coordination between Medicare and Medicaid results in higher costs and worse care, researchers stated.
To quantify how the use of services and spending by payer differ across need-based subgroups, the study looked at Medicare and North Carolina Medicaid claims data from 2014 to 2017. Included in that were 333,240 North Carolina Medicaid beneficiaries with full Medicaid benefits ever enrolled in Medicare during the study period.
Researchers observed fewer acute care events in Medicaid than Medicare, like emergency department visits, hospital admission, and inpatient days. The difference in acute care events was highest among the nursing home resident subgroup.
Medicare had more home health visits and hospice days, while Medicaid had more behavioral health service visits.
In terms of spending, combined total expenditure for Medicare and Medicaid was $26,874 per person-year. The proportion of total spending paid by Medicaid varied by need-based subgroup, with Medicaid contributing up to 70% of total spending for high-need populations, including nursing home residents.
However, researchers found that overall spending was evenly distributed between the programs, with Medicare at $14,175 and Medicaid at $12,698.
The findings indicate that integration of the two programs is necessary to better serve dual-eligible beneficiaries. Integrated programs currently exist, like the Program for All-Inclusive Care for the Elderly (PACE), Medicare-Medicaid-managed care plans including the Financial Alignment Initiative (FAI), and Dual Special Needs Plans (D-SNPs). Yet only 10% of dual-eligibles nationally are enrolled in programs that integrate Medicare and Medicaid care models, payments, and administrative processes, the study highlighted.
Researchers stated that expansion of PACE could help with integration efforts by allowing more individuals to enroll and receive integrated care, as well as increase opportunities for collaboration between non-PACE and PACE organizations.
"The diversity of health care use suggests that a tailored approach to integration strategies with comprehensive set benefits that comprises Medicare and Medicaid services, including LTSS [long-term services and supports], BH [behavioral health], palliative care, and social services is needed," researchers concluded.
"These findings may inform the design of integrated programs that could improve access to whole-person, beneficiary-centered care for dual-eligible beneficiaries and their families."
The organization stressed that hospitals and health systems are making progress on complying with regulations.
Ahead of a hearing by the House Ways and Means Committee this past week, the American Hospital Association (AHA) submitted to Congress recommendations to strengthen price transparency efforts.
Hospitals have been slow to react to the price transparency law, which went into effect on January 1, 2021, while CMS has been relatively lenient on enforcement. However, AHA said compliance will continue to rise as hospitals put the COVID-19 pandemic in their rearview mirror and pointed to CMS' recently updated enforcement processes for holding hospitals more accountable going forward.
When CMS initially assessed 235 randomly sampled hospitals between January and February 2021, only 27% had both a machine-readable file and consumer-friendly display, with 30% having the former and 66% having the latter.
In CMS' second assessment of 600 hospitals between September and November 2022, those figures improved drastically. The report found that 70% posted a machine-readable file and consumer-friendly display, with 82% having one or the other.
"The lower compliance rate in 2021, however, should not be interpreted as a lack of hospital commitment to transparency," AHA wrote. "Instead, it reflects the incredible challenges hospitals were experiencing in 2020 and 2021 in addressing the most acute phases of the COVID-19 public health emergency, which strained hospitals' staff and required the diversion of personnel and financial resources.
"As the pandemic phase of COVID-19 winds down and hospitals have been able to resume more standard operations, they are able to dedicate the resources necessary to build the full suite of price transparency tools."
Increased enforcement should also, in theory, incentivize hospitals to comply.
As of April 2023, CMS has issued more than 730 warning notices and 269 corrective action plan (CAP) requests, while fining four hospitals for noncompliance: Northside Hospital Atlanta ($883,180), Northside Hospital Cherokee ($214,320), Frisbie Memorial Hospital ($102,660), and Kell West Regional Hospital ($117,260).
More fines could be on the way after CMS recently announced that it will now require CAP completion deadlines, impose civil monetary penalties earlier and automatically, and streamline the compliance process.
To support hospitals and health systems as they work towards improving price transparency, AHA asked Congress and the Biden administration to review and streamline existing transparency policies "with a priority objective of reducing potential patient confusion and unnecessary regulatory burden on providers." These policies include the hospital price transparency rule and the No Surprises Act.
AHA also recommended that lawmakers "refrain from advancing additional legislation or regulations that may further confuse or complicate providers' ability to provide meaningful price estimates while adding unnecessary costs to the health care system." Before additional legislative changes are made to the hospital price transparency rule, recent modifications CMS made to the compliance process should be reviewed.
Finally, the organization stated that Congress should "continue to convene patients, providers and payers to seek input on how to make federal price transparency policies as patient-centered as possible."
Employers may follow a ruling by a federal judge that struck down preventive care services in the Affordable Care Act (ACA).
More than a quarter of employers either don't know if they will continue covering preventive care services or expect to be more selective, according to a survey by the National Alliance of Healthcare Purchaser Coalitions.
The organization polled 29 employers representing approximately 1.5 million employees from April to May 2023 to better understand employer attitudes towards health benefits and their plans following the end of the public health emergency (May 11).
Employers were asked about their feelings on preventive care in light of a federal district court judge in Texas invalidating enforcement of preventive care mandates under the ACA.
While 72% of respondents said they expect to continue providing coverage for all preventive services, 22% said they do not know how they will approach coverage for preventive care and 6% stated they plan to be more selective.
Furthermore, only 14% of employers are planning to fully cover over-the-counter COVID-19 tests, with 33% saying they will not cover them. Going forward, 71% said COVID treatment will be covered similar to non-COVID services and 24% will fully cover.
Three in four (76%) respondents said that keeping up-to-date on current COVID guidelines is central to their immunization strategies, while 81% agreed that the urgency for vaccinations is high.
When it comes to vaccine information, 81% of respondents believe that employers are a trusted source, compared to 62% for health plans.
"The pandemic has reinforced the critical role of immunizations in workforce health strategy but it also raised newfound concerns, confusion and misinformation," Michael Thompson, National Alliance president and CEO, said in a press release. "With the end of the public health emergency, employers expect to double down on education and employee engagement to encourage vaccinations across the board."
It will likely be some time before the dust settles on the litigation process on preventive care under the ACA, but in the meantime it could mean many lose coverage.
The bills aim to streamline the administrative process, which can create burden on both patients and providers.
Prior authorization has been a point of emphasis in legislation across the country this year, with nearly 90 reform bills being introduced in 30 states, according to the American Medical Association (AMA).
The medical group highlighted the momentum to solve prior authorization issues that can often lead to delay or denial of necessary care and stated that many of the bills draw on the AMA's model legislation.
The introduced reforms include establishing quick response times (24 for hours for urgent, 48 hours for nonurgent care), requiring health plans to honor prior authorizations for at least 90 days, making prior authorizations valid for at least one year and valid for the length of treatment for those with chronic conditions, prohibiting retroactive denials, reducing volume through exemption or gold-carding, and more.
"The momentum behind prior-authorization reform feels powerful right now, with dozens of bills in state legislatures this year and advocates laying the groundwork for next year," said AMA President. "These efforts join major reforms at the federal level being proposed and finalized. Policymakers and other stakeholders seem to be realizing what patients and physicians have known for a long time—prior authorization harms patients, undercuts clinical decision making and wastes valuable health care resources."
CMS is trying to do its part by releasing the Medicare Advantage (MA) final rule, which includes requiring approvals to remain valid for as long as medically necessary and offering coordinated care plan protection for patients.
However, a recent survey by the Medical Group Management Association found that prior authorization requirements in MA have only increased in the past 12 months.
More than four out of five surveyed medical groups (84%) said there are more requirements now, compared to less than 1% reporting requirements had decreased. Respondents also said the requirements are negatively affecting patients' access to care, provider costs, and practice workflows.
Senate Finance Committee finds mental health provider directories are widely inaccurate in the private program.
Ghost networks, or inaccurate provider directories, are a widespread problem for mental healthcare within Medicare Advantage (MA), according to a survey by the Senate Finance Committee.
A secret shopper study was conducted by the committee majority staff, who reviewed directories from 12 MA plans in six states to uncover the extent the mental health provider ghost networks.
Staff called 10 providers from each plan with the aim of obtaining an appointment for an older adult family member with depression. Of the 120 total listings contacted, 33% were found to be inaccurate, non-working numbers, or unreturned calls. Appointments could only be made 18% of the time and rates varied by plan and state, from 0% in Oregon to 50% in Colorado.
Overall, more than 80% of mental health providers staff attempted to contact were deemed ghost networks for being either unreachable, not accepting new patients or not in-network.
On multiple occasions, the number listed was for a different entity. In six instances, calls were routed to a national third-party provider matching service that asked for additional information about the patient's health needs and insurance information before setting an appointment. The study considered these calls as successful appointments under the assumption that an appointment would be made if the information was submitted.
Further, the time it took staff to reach providers varied across plans, ranging from one to three hours to contact 10 listings per claim. When staff were able to make appointments, some were offered within a month while several providers offered months in the future, including one instance in which the earliest appointment available was in 10 months.
"In a moment of national crisis about mental health, with the problem growing exponentially during the pandemic, the widespread existence of ghost networks is unacceptable," Senate Finance Committee chair Ron Wyden (D-Ore.) said. "When someone who's worried about their mental health or the mental health of a loved one finally works up the courage to pick up the phone and try and get help, the last thing they need is a symphony of 'please hold' music, non-working numbers, and rejection."
To combat ghost networks, Wyden stated that it will require a three-pronged approach of more audits, greater transparency, and stronger consequences for insurers with inaccurate directories. The report concludes by suggesting that Congress can hand out financial penalties for non-compliance.
The popularity of zero-dollar premium plans in Medicare Advantage (MA) is on the decline.
The average monthly premium for MA plans has increased by 50% in 2023 as fewer beneficiaries are choosing plans with lower out-of-pocket costs, according to a report from eHealth.
The online insurance marketplace analyzed more than 160,000 plan applications to eHealth during Medicare's Annual Enrollment Period from October 15 to December 7, 2022 to examine trends cost and plan selection trends among enrollees.
For the second year in a row, eHealth found an increase in average premiums, swelling from $6 per month in 2022 to $9 in 2023.
Part D premiums also went up, increasing 45% from $22 per month in 2022 to $32 in 2023. It was the highest increase eHealth tracked since it began reporting the figure in 2018.
Though the average premiums for MA remain relatively low due to high enrollment in zero-dollar premium plans, demand for those plans is going down, the report stated. For the first time since eHealth's initial report in 2018, popularity dropped as 84% of eHealth enrollees chose MA plans without a monthly premium, compared to 87% in 2022. In 2018, that figure was 63%.
Meanwhile, the report found that the average deductibles for MA and Part D plans decreased while Medicare Supplement increased.
MA plans saw a decrease from $121 in 2022 to $103 in 2023, representing a 15% change. Part D plans experienced a drop of 9% from $427 for 2022 to $389 for 2023. On the other end, Medicare Supplement plans saw deductibles shoot up 33% from $181 in 2022 to $241 in 2023.
"The widespread availability of $0-premium Medicare Advantage plans was a major enrollment driver over the past decade," eHealth CEO Fran Soistman said in a press release. "The avoidance of a monthly premium, coupled with the enriched benefits and value proposition relative to original Medicare has made these plans popular, particularly with seniors on a fixed budget.
"Our findings suggest the market may be fully saturated with zero-dollar premium plans, with more beneficiaries selecting Medicare Advantage premium-bearing plans that provide lower out-of-pocket costs."
A separate report by eHealth found that most MA beneficiaries are satisfied with their plan coverage but are more financially vulnerable than those with Medicare Supplement.
The research revealed that a lower income level for MA enrollees translates to 52% of beneficiaries saying they cannot afford any monthly premiums, while only 37% say they have enough savings to pay for hospitalization.
Surveyed medical groups reveal burdens have increased in the past 12 months, resulting in delays or denials for necessary care.
Despite scrutiny of prior authorization practices in Medicare Advantage (MA), requirements for the administrative process have only grown over the past year, according to a survey by the Medical Group Management Association (MGMA).
With MA continuing to experience a significant rise in enrollment, MGMA surveyed 601 medical groups to better understand the impact of prior authorization in the program.
More than four out of five respondents (84%) said prior authorization requirements for MA have increased in the past 12 months, with less than 1% reporting requirements had decreased.
Practices ranked MA as the most burdensome program when it comes to obtaining prior authorization (46%), ahead of commercial plans (32%), Medicaid (20%), and traditional Medicare (4%).
Prior authorization in MA is becoming a greater issue due to more and more beneficiaries choosing the program. The survey found that 58% of practices saw 15% or more their patients either switch from traditional Medicare to MA or between MA plans, while 84% of respondents said they had to reauthorize existing Medicare-covered services for those Medicare enrollees who've switched plans.
"With half of all Medicare beneficiaries enrolled in private Medicare Advantage (MA) plans, prior authorization reform has taken on new urgency at the federal level," Anders Gilberg, senior vice president of Government Affairs at MGMA, said in a statement. "Medical groups now identify prior authorization in the MA program as more burdensome than commercial insurance and Medicaid. More needs to be done to protect beneficiaries."
Prior authorization requirements are having unintended consequences such as delaying and denying necessary care, increasing practice costs, and disrupting provider workflows.
Nearly all medical groups surveyed (97%) said their patients experienced delays or denials for necessary care due to the administrative process, with requirements varying widely across payers. More than nine in 10 respondents (91%) agreed that a single standard electronic prior authorization system across all insurers would alleviate burden on their practice, while just 7% said MA plans they're contracted with offer a gold-carding program.
With providers facing significant financial pressure in the wake of COVID-19, prior authorization is only adding to practice costs. Over three-quarter (77%) of respondents said they have hired or redistributed staff to work on prior authorizations due to an increase in requests, and 60% said there are at least three different employees involved in completing a single prior authorization request.
Even when practices have enough of a workforce and adequate resources to devote to prior authorization, requirements often mean spending plenty of time and energy on requests instead of caring for patients. More than a third of practices reported spending upwards of 35 minutes on an average single prior authorization request, with nearly 5% spending 91 minutes or more.
CMS' MA final rule aims to tackle these issues by streamlining prior authorization, including requiring approvals to remain valid for as long as medically necessary and offering coordinated care plan protection for patients. The rule has received widespread support from medical groups like MGMA, along with payer groups.
"MGMA supports commonsense policies that alleviate onerous administrative requirements and improve the timeliness of clinical care delivery," Gilberg said. "Efforts to streamline, standardize, and ultimately reduce the volume of prior authorization demands on medical practices such as CMS' proposed Prior Authorization and Interoperability Rule, and the Improving Seniors' Timely Access to Care Act in Congress, will further strengthen and modernize the MA program."
A survey finds health plans have room for improvement in areas such as having accurate behavioral health directories.
Nearly all employers agree that mental health coverage is a vital component of benefits offered to employees, but few are satisfied with their health plan's services, according to a survey by the National Alliance of Healthcare Purchaser Coalitions.
The organization polled 221 employers that provide health coverage to over 10 million employees and dependents from February to March 2023 to gauge experiences with coverage networks.
Only 31% of respondents said they were satisfied with network access for behavioral health services, with 99% agreeing that offering mental health coverage is important for employees.
"Supporting the mental health and wellbeing of employees and their families is a top priority for major employers," Mark Wilson, vice president of health and employment policy and chief economist for the HR Policy Association, said in a press release.
"We need to work collaboratively with all stakeholders, especially our health plan and vendor partners, if we are going to be able to provide timely access to affordable, high-quality behavioral health providers."
Additionally, 31% of those surveyed said they were dissatisfied with their health plan's efforts to assess and address gaps in network access, while just 34% of employers reported that their behavioral health directories were accurate.
When it came to quality of care, more than half (54%) of employers said they were satisfied with the promotion of standardized measurement for behavioral health services, but only a third (33%) were satisfied with engagement and reporting of outcomes.
Another area health plans fell short was in supporting, promoting, and incentivizing integration of behavioral health into primary care, with just 28% of respondents expressing satisfaction.
Only 39% of respondents said they were satisfied with their workplace mental health support, despite 92% believing high engagement in workplace programs was important.
Finally, payers missed the mark on health equity, according to employers. A little more than a quarter said they were satisfied with their plans evaluating and tailoring behavioral health services to diverse communities, such as LGBTQ+ and people of color.
"Many of the services provided, particularly in managing network access, continue to fall short of employer expectations," Michael Thompson, National Alliance president and CEO, said in a statement. "While there are bright spots, as an industry we still have a long way to go to meet the needs of employees and their families."
Emergency ground ambulance services are one of the blind spots of the regulation that could be improved with federal intervention.
The No Surprises Act (NSA) is protecting patients from most surprise bills as intended, but the law's scope fails to protect certain vulnerable pockets, according to new analysis by the Urban Institute and Georgetown University's Center on Health Insurance Reforms, with funding from the Robert Wood Johnson Foundation.
Researchers conducted 32 interviews with federal and state regulators, as well as organizations representing a spectrum of stakeholders like consumers, employers, payors, physicians, hospitals, air ambulance providers, and medical billing companies.
Informants largely agreed that one year after the NSA went into effect, patients are being "well protected" from surprise bills. In one state, for example, insurance regulators said that of the 1,800 insurance-related consumer complaints received in 2022, only two were NSA-related.
Another state regulator was a "little surprise" by the lack of complaints, but "attributes this to insurers' and providers' cooperative efforts to eliminate balance bills and correct them when they occur."
The analysis also found that patients appear to be protected from services that previously left them exposed to surprise billing, like air ambulance services. Additionally, researchers said the NSA is "getting consumers 'out of the middle' of payment disputes between providers and payors.
However, gaps remains in the law for other services like ground ambulance, which one state regulator noted can result in patients being billed nine out of 10 times.
"Although the limited evidence to date suggests that consumers are being well protected from balance billing in the situations covered by the NSA, some stakeholders remain concerned that gaps in the law can leave consumers with unexpected financial liability," the report stated.
"The failure to include emergency ground ambulance services, in particular, means that many patients will continue to be balance billed for out-of-network services they had no choice but to accept."
Though researchers say it's too early to determine whether the NSA will "constrain the growth in health insurance premiums and encourage broader provider networks," policymakers need to track provider and insurer compliance for potential billing patterns to address vulnerable areas.
In a survey by Morning Consult, 20% of respondents said they or their family had received a surprise bill in 2022, with another one in five billed after being treated by an out-of-network provider at an in-network facility.
Separate data by AHIP and the Blue Cross Blue Shield Association revealed that while the NSA averted over nine million surprise bills in the first nine months of being a law, it also led to providers submitting over 275,000 arbitration claims—nearly 10 times more than originally anticipated.
