Medicare Part A and Part B appeals rose markedly between 2008 and 2012 with most of the increase coming from appeals of inpatient hospital claims. "We think that the recovery audit contractors are driving a lot of the increase," says an OIG official.
First-level appeals for Medicare Part A and Part B are on the rise, but most of those appeals are ultimately unsuccessful, a new federal study shows.
The study from the Office of the Inspector General for the Department of Health and Human Services found that more than 1 billion Medicare claims were processed in 2012, of which 3.7 million were appealed at the first level—an increase of 33% since 2008. These are also known as "redeterminations"
"About 80% of the first-level appeals were for Medicare Part B services and 20% for Part A," said Maria Maddaloni, team leader at OIG's Office of Evaluation and Inspections in Boston. "But Part A appeals have increased by over 500% from 2008 to 2012. Most of the increase was with appeals of inpatient hospital claims. We think that the recovery audit contractors are driving a lot of the increase."
By 2012, appeals involving RACs accounted for 39% of all appealed Part A claims. Contractors decided in favor of Part A appellants at a lower rate than that for Part B appellants.
"In 2012, only 1 out of 4 Part A appeals was decided in favor of the one making the appeal," Maddaloni said. "In 2012, about half of Part B appeals were decided in favor of appellants. This was also the case for appeals of physician services, which make up most of the Part B appeals."
Maddaloni said the study represents OIG's first examination of the first level appeals process for Medicare Parts A and B. The study focused on redeterminations processed from 2008-2012. The study analyzed the Centers for Medicare and Medicaid Services' Contractor Reporting of Operational and Workload Data system. OIG auditors surveyed 18 contractors that process redeterminations for Medicare Parts A and B and interviewed five RACs to learn more about how they process redeterminations.
While contractors generally met mandatory timeframes for processing redeterminations and paying appeals for successful appellants, Maddaloni said the RACs were not as prompt in meeting timeframes for transferring case files for second-level appeals. "Processing timeliness for Part A appeals dropped in 2012," she said.
"Contractors told us it was because of the increase in Recovery Audit Contractor appeals. Part A appeals typically require the review of an entire medical record, so they're much more time and resource intensive to process than Part B appeals."
Maddaloni said the audit could not provide detail on the specific claims. "Most of the Recovery Audit Contractor appeals involved short-term inpatient hospital stays. Aside from that, CMS has limited data available," she said. "However, it's implementing the Medicare Appeals System for first-level appeals. This is a database that will have specific information about appeals. It should make it easier for contractors and CMS to track appeals."
"In fact, two of the three recommendations in our report have to do with the Medicare Appeals System," she explained. "We recommended that CMS use it to oversee contractors and to monitor data quality. Our other recommendation was that CMS encourage information-sharing, like best practices, among its contractors."
Hospitals that have the best survival outcomes are not doing the best job in the area of patient satisfaction, says a healthcare economist. Better indicators of quality are the number of beds and patient volume.
While quiet hospitals with friendly doctors and nurses who are attentive and quick to answer bedside buzzers might boost patient satisfaction scores, they don't necessarily correlate with quality care.
A far more important indicator of quality outcomes is the number of beds in the hospital and patient volume, says Robert D. Lieberthal, lead author of the study appearing in Risk Management and Insurance Review.
"There is a lot of information patients can use to select a hospital," says Lieberthal, a healthcare economist and assistant professor at the Jefferson School of Population Health in Philadelphia. "However, this is usually a laundry list of indicators that may not mean much for the lay person or that they may be unaware even exists. Our method compares hospitals directly, so that a patient choosing between two or three hospitals can easily compare them and choose the highest quality facility."
Lieberthal's findings are based on a statistical methodology known as PRIDIT that was originally designed to detect automobile insurance fraud. He reconfigured the model and uses it to establish a predictable scale for hospital quality so that actuaries could map out reimbursement rates over years for programs such as Medicare and the Patient Protection Affordable Care Act.
"We took what is simply a statistical method and put in quality data and what that method told us was which hospitals were of higher or lower quality," Lieberthal says.
"Then we validated that by looking at whether the quality scores in one year predicted the outcomes in the next year. We created a score for 2010—these are the higher and lower quality hospitals—and then we validated that that was correlated with mortality in 2011. We both applied the method and validated it by saying that it could predict future outcomes."
Lieberthal's study relied on Medicare data available on Hospital Compare and other data from the American Hospital Association.
"Our method was designed to take these different types of data, hospital characteristics, process measures of care, outcome measures, and satisfaction and then from those measures, to determine the score. We didn't decide ahead of time what was important. Our statistical method told us which were the important measures and which ones were correlated with quality," he says.
"Hospitals that scored the highest or 'always' on satisfaction measures such as patients received help as soon as they wanted it or nurses or doctors communicated well, that was correlated with lower quality as measured through our method."
In other words, a patient in a large, high-volume hospital that is highly rated under Lieberthal's model might dislike the noise and bad food but will survive a life-threatening heart attack. "Based on this study the hospitals that have the best survival outcomes are not doing the best job of satisfying patients," Lieberthal says.
Lieberthal believes his method could be used by the federal government as a way to correlate the different quality measures that they collect and put them into a single quality score. "For example, right now Medicare has a model that they use to do mortality risk adjustment. The hospitals that tend to see sicker patients get an adjustment for that and the mortality scores that are reported in Hospital Compare," he says. "We would definitely see a value in Medicare applying this model to all of the data they generate, not just the data they put in Hospital Compare but in their much larger set of claims and other data that they generate as a large health insurer."
The study was funded by the Society of Actuaries.
"I was commissioned by them to develop a way to predict the quality of hospitals so that insurance companies and hospitals could plan their reimbursement rates," Lieberthal says.
"We see an implication of this study using the overall scores that we developed to pay more for the hospitals that were better or include the hospitals that were better in preferred provider networks. For the hospitals that didn't do as well, and some of that was because of these satisfaction measures, insurance companies might want to consider not including them in a preferred provider network."
Unlike physicians and RNs, nurse practitioners report remarkably high levels of job satisfaction thanks to a rise in opportunities to practice independently, and confidence that their earning power will increase.
A small survey gauging job satisfaction among nurse practitioners [PDF] found that 100% of them are upbeat about their profession. The survey also found that 99% of NPs are optimistic about their future, 97% would recommend becoming an NP to their children, and 96% are optimistic about the future of their profession.
The survey sample was limited and included responses from 222 NPs who attended the June annual meeting of the American Association of Nurse Practitioners in Las Vegas. Phillip Miller, vice president of communications at Irving, TX-based healthcare recruiters Merritt Hawkins and Staff Care says there are about 155,000 nurse practitioners in the United States and he conceded that only limited observations could be drawn from such a small sampling.
"It is not a scientific survey but it is more of a weathervane indicator of where things are going," Miller says. "The reason we think it is somewhat significant is that the response to the questions was overwhelming. Literally all 222 said they felt positive about it, even if it is not that great to that extent we think it is an indicator that they are pretty happy in their profession."
"And unlike physicians and even nurses we have surveyed we have never seen satisfaction rates as high. We usually get 10%–15% of the people who have something to grumble about or something that didn't meet their expectations or who have regrets. We got almost none of that this time."
High Pay and Emotional Rewards
Miller says NPs have a lot to be upbeat about.
"They are feeling pretty heady about where the scope of practice for NPs is heading. It is broadening," he says. "They are getting more autonomy. More states are allowing NPs to practice independently. There is a sense of confidence that their income and prestige are going to increase."
When asked what they plan to do in the next three years, 63% of NPs said they will continue in their practice. However, 10% said they would work independently, 10% said they would work in temporary practice, and 12% said they would work part-time.
The NPs reported seeing an average of 17 patients per day and earned an average of $95,800 a year. Miller says it is not uncommon for NPs to command six-figure salaries. "It's a good return on investment on your time and money and education for what you get," he says. "They also get the emotional rewards of taking care of patients."
The results of the NP survey provide a sharp contrast to surveys gauging job satisfaction among physicians. A recent national survey of physicians conducted by Merritt Hawkins found that 32% of respondents said they feel positively about their profession, 13% said they are optimistic about the future of medicine, and 42% would recommend medicine as a career to their children or other young people.
Shifting Roles
"NPs and doctors are a mirror image of each other," Miller says. "The things that NPs are happy about, increasing income and clinical autonomy and the feeling of more power within the system, most doctors are experiencing exactly the opposite. Doctors feel like their clinical autonomy is being eroded and that reimbursements are being cut, and in a lot of cases they are. Before they were preeminent on the healthcare team and now it's more like they are part of the team and not the dominant player."
Miller says other surveys have found dissatisfaction among registered nurses. "They're dealing with a lack of autonomy. Everyone is breathing down their necks. They have a physically more demanding job than an NP, who is pretty much interacting with patients and nurses are doing physical things such as lifting the patients and running from bed to bed in a hospital. They actually complain a lot about their bodies just not holding up," he says.
"Nurse income is not that bad but it is not as good as what you're getting as an NP. They don't have that satisfaction and they are not really feeling like they are managing the patient's care like an NP would but they are doing sort of the grunt work."
Overextended
While much has been said about NPs and physicians' assistants alleviating the physician shortage, the survey shows that 75% of NPs said there is a national shortage of NPs. More than 80% of NPs said they are overworked in their practices or are at full capacity. NPs said they spend an average of 25% of their time on non-clinical paperwork.
"We have this hope that NPs and PAs are going to ride to the rescue in the doctor shortage but we are already seeing evidence that NPs and PAs are already overextended," Miller says.
While the future looks rosy, when 100% of the responses are positive there is no place to go but down.
"The only negative I see is be careful what you wish for," Miller says. "When you become an independent practitioner the onus of running a practice and having the responsibility falls on you and a lot of doctors find that to be a challenge. That is the only caveat I see there out there right now."
The survey was conducted by Staff Care, a temporary physician and NP staffing firm and an affiliate with Merritt Hawkins under AMN Healthcare.
A small Illinois hospital comes up with a remarkably simple, inexpensive, and effective strategy to guard against falls and wins an award in the process.
By some estimates falls among older Americans cost about $30 billion in direct medical costs each year. That number may reach $55 billion in inflation-adjusted dollars by 2020 as the demographic ages and becomes more susceptible to falls.
Falls aren't cheap. Medicare estimates from 2002 placed the average cost per fall for "community-dwelling seniors" at between $9,113 and $13,507, making fall-related injuries one of the 20 most expensive medical conditions among that demographic.
The Agency for Healthcare Quality and Research estimates that in the U.S. between 700,000 and one million peoplefall within hospitals, resulting in fractures, lacerations, or internal bleeding and driving up costs. Citing research showing that about one-third of falls can be prevented, the Centers for Medicare & Medicaid Services in 2008 stopped reimbursing hospitals for treating certain traumatic injuries that occur because of falls.
With so much at stake, many hospitals have made fall prevention a high priority over the last few years. Staff at Advocate Eureka Hospital, a 25-bed critical access hospital in Eureka, Ill., recognized they had a problem several years ago and created a program to examine hospital culture and preventive strategies around patient falls.
It's worked.
In 2009 the hospital had 15 patient falls. In 2011 it had 10 falls. In 2012 they had five falls. So far in 2013, the hospital has had just one patient fall, and has vaulted into the 10th percentile among best performing hospitals in its peer group, based on National Database Nursing Quality Indicators.
The dramatic turnaround has not gone unnoticed. Advocate Eureka was a winner of the Illinois Hospital Association Institute for Innovations in Care and Quality's 2013 Quality Excellence Achievement Award.
"Our patients tend to be elderly; 83%–85% of our population is Medicare patients and as a critical access hospital we have swing beds which are skilled nursing beds and more equivalent to a nursing home level of care. They tend to be elderly," says Jane McCully, RN, CPHQ, case manager/quality analyst Advocate Eureka. "There already is a fairly high percent of the population that just fall anyway at home and elsewhere just because of their age. We felt an obligation to do as much as we could to prevent that and protect them while they were in the hospital."
After the 15 falls in 2009, the staff at Eureka formed an interdisciplinary team to tackle the issue. "In 2009 that had been the highest it had ever been and there were a lot of factors that play into it," McCully says. "Three of those falls were the same patient who wouldn't oblige the fall prevention guidelines so there are factors like that internally that play into those numbers being higher. But that was still too high."
The strategy the group came up with was remarkably simple, inexpensive, and effective. At its core was a concerted and sustained effort to raise fall prevention awareness around the hospital.
"We called it All Hands on Deck and actually educated everybody in the hospital, even volunteers and housekeeping staff," McCully says. "People that might not have much patient contact but might be passing by a room and see a patient out of bed with their yellow socks on and knew that was not where they needed to be and they'd go and check with the nurse and tell her that the patient needed some assistance."
Other simple tactics included posting white board notices in patients' rooms assessing their fall risks and listing precautions. "It noted if the patient was a high risk or a standard risk for a fall, what their level of need was as far as what kind of equipment they needed to transfer from, say the bed to the toilet, whether they needed a walker or how many people needed to assist," McCully says. "Those things were hardwired into the white board on the wall so all the nurse or staff member had to do was circle what the precaution was that that patient needed."
The hospital also posted a "fall calendar" on its website marking the number of consecutive says since the last fall—which stood at 258 days when McCully and I spoke this week. "This was an obvious way to show that the staff was keeping track of these things and that they are making a difference," she says.
Patients are also made aware of fall risks. "We have a fall agreement that we use with patients where it is appropriate to bring them on board with what their plan is as far as fall prevention," McCully says.
"We want them to understand that we know you may not like to call for help because you are used to being independent. But you are in a hospital. Things are not the same here as they are at home and you need to let us help you when you get up to go to the bathroom or whatever. Nurses and staff members on the floor do a good job of educating them."
The common theme in all of these tactics is to raise awareness of the risks posed by falls, and to create an environment where everyone plays a role in preventing them. The good news is that these tactics can be done with very little financial stake, and the return on investment can be huge.
"This is one area where I feel like we have had success in hard-wiring these practices so that everybody is on board with what needs to be done to keep the patient safe from a fall," McCully says. "Sometimes we have so many things in healthcare that are in front of us all the time, that it is hard to always focus on some of the stuff that maybe is the most important. That has not been the case with this. It is something that everybody has embraced and taken their own accountability for their piece of making it happen. We did so many different things that spoke to different groups of people as this played out that I think we were able to make a real change."
McCully says she is not concerned about staff losing focus or feeling like the problem no longer exists as the number of falls has plummeted.
"With this particular issue, that hardwire change is there and I don't see that that is going to go away when we focus on something else," she says. "I am not saying we aren't going to have another fall ever, of course. But I don't see that the changes we've made are going to be transient. They are hardwired."
High traffic volume contributed to consumer complaints about problems with the federal health insurance exchange and several states operating their own marketplaces reported similar problems on launch day.
Nearly three million people visited the federal government's health insurance marketplace by mid-afternoon on Tuesday, the first day of the six-month extended enrollment period, the Department of Health and Human Services announced.
However technical glitches and the high volume of traffic on HealthCare.gov generated widespread complaints from residents in the 36 states served by the federal exchange who said they could not access the site. Those complaints and accompanying media reports about opening day snafus for the central component of the Patient Protection and Affordable Care Act prompted public assurances from President Barack Obama Tuesday that the glitches would be worked out in the coming hours and days.
"Like every new law, every new product rollout, there are going to be some glitches in the signup process along the way that we will fix. I've been saying this from the start," Obama said during a Rose Garden address. "For example, we found out that there have been times this morning where the site has been running more slowly than it normally will. The reason is because more than one million people visited healthcare.gov before 7:00 in the morning."
"To put that in context, there were five times more users in the marketplace this morning than have ever been on Medicare.gov at one time. That gives you a sense of how important this is to millions of Americans around the country, and that's a good thing. And we're going to be speeding things up in the next few hours to handle all this demand that exceeds anything that we had expected."
The exchanges and other core components of the PPACA remain operational despite the government shutdown on Tuesday because they are funded through mandatory appropriations, HHS said. The president on Tuesday reaffirmed his rejection of demands by House Republicans who refuse to pass a stop-gap budget to keep the federal government open unless the administration agrees to delay by one year the implementation of the PPACA.
"I'll work with anybody who's got a serious idea to make the Affordable Care Act work better. I've said that repeatedly," Obama said. "But as long as I am president I will not give in to reckless demands by some in the Republican Party to deny affordable health insurance to millions of hardworking Americans."
In addition to the 2.8 million visits on the exchange website, HHS reported that by mid-afternoon another 81,000 people called an exchange hotline, and 60,000 requested live chats. However, HHS officials at an afternoon media teleconference repeatedly declined to tell reporters how many people had signed up for coverage, which takes effect on Jan. 1, 2014 for people who enroll before mid-December.
"We certainly appreciate the question and obviously we are interested in that information too," Julie Bataille, communications director at the Center for Medicare and Medicaid Services, told reporters. "I would just point to some historical experience getting data and what we have seen with other implementation efforts over time and we know that it takes some time to pull accurate data and information together. We will be able to do that for you as soon as we can and we will make sure to let you know what that schedule will be."
In addition to problems with the federal exchange, several states operating their own exchanges also reported problems related to high volumes and technical glitches.
CMS Administrator Marilyn Tavenner sat in on the half-hour long media call and got an earful from journalists across from across the country who related the frustrations of people trying to access the exchanges in their states. Like the president, Tavenner reminded the reporters that the glitches were to be expected given the magnitude of the undertaking.
"I would just remind you that this is day one of the process. This is a marathon, not a sprint," Tavenner said.
The federal government shutdown does not delay the health insurance exchanges from launching as scheduled. Health insurance coverage begins on Jan. 1, 2014 for those who sign up by Dec. 15.
The sun rose in the East this morning and health insurance exchanges opened for business, vacating predictions in some corners that this critical provision of the Patient Protection and Affordable Care Act would usher in The Apocalypse.
The six-month extended enrollment period runs until March 2014 and coverage begins on Jan. 1, 2014 for people who sign up by Dec. 15.
While the success of the exchanges has been the subject of widespread speculation, nobody really knows who or how many of the estimated 24 million eligible people will sign up for coverage.
"It's a good thing that they have six months to figure it out," says Paul Lambdin, director of Deloitte Consulting. "We have to remember this is an outreach to a large part of the population that may be somewhat hard to reach given the demographics and [they are] very unfamiliar with the product."
A Commonwealth Fund survey released this week found that 76% of U.S. adults are aware of the PPACA's individual mandate, while only about 40% are aware that the health insurance marketplaces open today and that financial help for premiums is available. Commonwealth Fund vice president Sara Collins said the survey found that once people were made aware of the marketplaces, 61% of those who are potentially eligible said they would be likely to shop for coverage.
In addition, the survey found that only 32% of adults with incomes under 250% of the federal poverty level of $28,725 for an individual and $58,875 for a family are aware of the subsidies, compared to 47% of those with higher incomes.
"These survey findings demonstrate that people who need the health insurance coverage the marketplaces will offer want to shop for plans and find out if they are eligible for financial help," Collins said in prepared remarks.
"However, more work needs to be done to ensure that people who may be eligible are aware of the marketplaces and the subsidies. State and federal efforts to educate people about the marketplaces during the six-month enrollment period beginning in October need to be intensive enough to help close the information gaps this survey highlights."
Unfortunately for health insurance companies and the federal government, the Commonwealth Fund survey showed that only 55% of young adults ages 19 to 29 who are potentially eligible for the coverage said they would be likely to use the marketplaces, compared to 65% of those ages 30 to 49.
Adults with health problems were slightly more likely to say they would use the marketplaces than adults with no health problems (65% vs. 57%). Supporters of the exchanges are banking on a healthy mix of younger enrollees to offset the cost of care provided for older and sicker people.
Clare Krusing, spokeswoman for America's Health Insurance Plans, says the plans have focused on making the coverage affordable to attract younger enrollees, but it's not clear if they'll sign up.
"Experience in the states clearly demonstrates that enacting health insurance reforms without ensuring broad participation, particularly among those who are younger and healthier, will have significant unintended consequences for consumers and employers," Krusing says.
"The healthcare reform law will expand access to insurance and broaden insurance benefits. Everyone can sign up, including those with pre-existing medical conditions. These new benefits bring new costs. Financial assistance will be available to help qualifying individuals and families pay for coverage. Even with this new assistance, the new benefits will cause some people who currently have insurance to pay more than they do today. When faced with higher health care costs, many younger, healthier people may choose to forgo purchasing coverage until they need it, especially when the penalty for not having insurance is as low as $95. If this happens, costs will go up for everyone, young and old."
To get the word out on the exchanges and help consumers find the right coverage, the Department of Health and Human Service has enlisted more than 900 volunteer "Champions for Coverage" across the nation. The champions include the American Academy of Family Physicians, American Nurses Association, Lutheran Services in America, and YWCA USA.
"We are both excited and thankful to have such a wide variety of businesses and organizations that want to get involved and help us spread the message about these new opportunities for people to access quality, affordable health insurance with open enrollment beginning tomorrow," Marilyn Tavenner, administrator for the Centers for Medicare & Medicaid Services said in prepared remarks.
The exchanges are not tied to annual spending bills, so they will continue to operate even in the wake of the federal government shutdown triggered by stalled budget talks in Congress.
The demand for primary care doctors is being fueled by health reform mandates as well as physician turnover, which has been on the rise over the past three years, a physician recruitment report finds.
Primary care doctors and mid-level staff continue to be in high demand with healthcare organizations preparing for coordinated care and the Affordable Care Act.
The Association for Staff Physician Recruiters' 2013 In-House Physician Recruitment Benchmarking Reportfinds that nearly 70% of responding organizations searched for a family medicine physician in 2012. Other top searches for physicians included hospitalists, internists, pediatricians and emergency medicine. Advanced practice providers made up more than 17% of all searches. Approximately 38% of nurse practitioner searches and 43% of physician assistant searches were for primary care.
ASPR Executive Director Jennifer Metivier says the report includes metrics on nearly 5,000 physician and advanced practice provider searches conducted in 2012 by in-house recruiters employed by healthcare organizations across the country.
Nearly 33% of open positions remained unfilled at year's end, and recruiting proved to be even more difficult for non-urban areas. The study found a statistically significant difference in the 34.9% of open positions in healthcare organizations serving populations of 10,000 or less compared with those 29.5% open positions for organizations in populations of more than 500,000. Specialties that were least likely to be filled were dermatology, infectious disease, OB/GYN subspecialties, endocrinology/metabolism and neurology.
Approximately 63% of the reported searches were for hospital or integrated delivery systems, while 13% were for physician-owned practices.
The study found that physician turnover has been on the rise over the past three years; from 5.6% in 2010, to 6.3% in 2011, to 7.2% in 2012. "This trend is not surprising," Metivier said. "With the improvement in the economy and the housing market, we're seeing more physicians being able to relocate or retire, resulting in increased turnover."
The ASPR findings are consistent with those of other physician recruiters. In August Merritt Hawkins noted in its annual report that family physicians topped the list of the 20 most sought-after specialties for seven straight years.
Merritt Hawkins said the demand for primary care doctors is being fueled by health reform mandates that will shift healthcare delivery away from fee-for-service and toward quality outcomes, wellness, and population health.
After two decades of mostly declines, the percentage of Americans with health insurance inched up between 2011 and 2012, according to a new study. But with the advent of health insurance exchanges, the future level of insured people is impossible to know.
After two decades of mostly declines, the percentage of Americans with health insurance inched up between 2011 and 2012, according to a new study from the nonpartisan Employee Benefit Research Institute. The study also found that a downward trend in employer-based coverage since 2000 leveled off between 2011 and 2012. But with the advent of health insurance exchanges, the future level of insured people is impossible to know.
Paul Fronstin, director of EBRI's Health Research and Education Program and author of the report, attributed the improved coverage trends to a combination of factors. "Premium growth has been moderate compared with past years, and you have more people working with access to coverage, and the unemployment rate is falling, which means that employers aren't cutting back as much," Fronstin says. "We aren't looking at a V shape. We are talking about a fall all of these years and then it stopped."
The numbers in the study are gleaned from the U.S. Census Bureau's March 2013 Current Population Survey and reflect 2012 results, which is the latest available data. As a result, Fronstin says the study does not necessarily reflect any workplace coverage trends that may be shifting with the six-month open enrollment period for the individual plans that will be sold on the health insurance exchanges beginning October 1.
Even with the overall declines over the past 18 years, employer-based coverage remains the dominant source of healthcare coverage for most working non-elderly adults, ages 18–64. In 2012, 58.5% of the nonelderly population had employment-based health benefits, down from the peak of 69.3% in 2000 from 1994–2012. The 2011 level was 58.4%, essentially the same as 2012. The working-age population with health insurance coverage increased to 82.3% in 2012, up from 82% in 2011 and 81.5% in 2010. The uninsured rate for that group was 17.7% in 2012, down from 18% in 2011, the report says.
Fronstin says it's all but impossible to predict how the exchanges and the individual market will affect employer-based coverage in the coming years because estimates have been all over the map.
"When you look at [Congressional Budget Office] estimates on what is going to happen, they show a lot of people losing coverage but a lot of people gaining coverage," he says. "You are going to have some small businesses that will go to these exchanges that never offered coverage before because they never had a vehicle. They don't have to worry about that one sick person making coverage unaffordable for them. There could be a lot of dynamics here."
"CBO did some scenario modeling about 18 months ago and basically they came up with four scenarios," he says. "The worst scenario was 20 million fewer people with employer-based coverage as of 2019, and the best scenario was something like 5 million more covered by employer-based coverage. I throw up my hands; I can't make a prediction. What ultimately happens in terms of the number of people covered by employer-based coverage depends upon our assumptions."
The Census data from 2012 found that those most likely to get their coverage from employers include full-time, year-round workers; public-sector workers; workers in manufacturing; managerial and professional workers; and people in wealthy families. Poor families are most likely to be covered by Medicaid or the Children's Health Insurance Program.
The EBRI study found that the overall percentage of people with public-program health coverage was unchanged in 2012, accounting for 22.6% of the nonelderly population. The percentage with individually purchased health coverage was slightly higher in 2012 but has basically hovered around 7% since 1994.
Fronstin says it's not clear if the exchanges and a move to the individual market will eventually replace employer-based coverage as the dominant access point for health insurance.
"The Affordable Care Act has changed the playing field like it has never been changed before. Even employers who are offering health benefits are thinking about moving in the direction of creating more of a shopping experience," he says. But he notes that "the federal employees program has been doing this for 50 years, so it's not like this is something new and out of the blue."
Technology is propelling a shift toward a consumer marketplace for insurance. "We are doing this on the Internet with everything else we shop for. You look at Amazon. You look at Travelocity," he says. "There are different websites for different things and people are getting used to shopping with resources and the information that they need to make informed decisions; bar coding things in stores and looking up a review on the Internet. I am not surprised that health insurance seems to be catching up to it."
"It seems daunting now but a couple of years from now it may not. Medicare went through this on a more micro level with the drug benefits in 2006. It was pretty disruptive at first but it settled down."
Hospital associations and the feds are encouraging community and rural health providers to step up for health insurance exchanges. But for many, it's just one more mandate.
As the six-month open enrollment period for the new health insurance exchanges created under the Patient Protection and Affordable Care Act begins on October 1, community and rural hospitals will be the default advisors for patients and consumers trying to find the right coverage.
The nation's three largest hospital associations—American Hospital Association, the Catholic Health Association, and the Federation of American Hospitals—embraced that idea at a joint webcast last week and encouraged the hospitals they represent to play an active role in signing up their patients for coverage through the exchanges.
"People will only enroll if they know that this coverage is available and if they understand how to access these new coverage options," AHA President & CEO Rich Umbdenstock said at the event. "That is where we can help. It is critical that community stakeholders—certainly hospitals, faith groups, civic organizations and others—come together to help make the enrollment process straight forward and widely available."
Meanwhile, the Department of Health and Human Services said this week it would divvy up $2.5 million and give $25,000 each to 52 hospitals and other rural providers to "educate and enroll uninsured individuals and families living in rural America in new health coverage options."
"Soon millions of Americans in rural communities will have new opportunities for quality, affordable health coverage through the Health Insurance Marketplace," HHS Secretary Kathleen Sebelius said in prepared remarks. "Through these awards, trusted community providers will help people understand their coverage options, including whether they can get a discount on costs."
(It's not clear if that money will be nearly enough for the task at hand, but undoubtedly the thousands of tiny rural hospitals out there whose critical access designation is under threat will take comfort in knowing that they are still "trusted community providers.")-
Of course it makes sense that hospital associations would actively press their members to push HIX and that these member hospitals would embrace the challenge as well, if only for the bottom line and regardless of how they feel about the larger reforms under the PPACA. The more insured patients, the more reimbursements, the less charity care, etc.
Lori Real, COO of Bi-State Primary Care Association in Vermont, says the nonprofit is using its $25,000 grant to support outreach and enrollment in select parts of that almost entirely rural state.
"We are working with the Open Door Clinic to provide education and assistance to uninsured residents planning to enroll in Vermont Health Connect beginning October 1," Real told HealthLeaders Media. "Navigators are trained and already providing information through libraries, famers markets, and direct outreach to farmers and farm families in Addison County."
For other providers, the rollout is proving to be more difficult.
"We don't have anyone trained as of yet, but when it comes to it community hospitals in a lot of smaller communities are the main healthcare resource. if not the only one," says Tim Putnam, CEO at Margaret Mary Community Hospital in Batesville, IN.
"There is no other resource that can do it so we have to be there for patients by default. Unfortunately we are not well versed on it yet. There are a lot of variables, and each state and each region in the state have a lot of different options available. We are going to have to get up to speed on this quickly," he says.
While all providers will benefit from serving more insured patients, it seems a little late in the game to be dropping this responsibility into the laps of small hospitals that are already struggling with a host of challenges related to lower admissions and reimbursements and a numbing number of new and complex mandates, ranging from meaningful use Stage 2 to ICD-10.
"It's been one trim or one mandate after another. It is so difficult to keep track of them," Putnam says. "It's just another thing we are going to have to provide, but a big part of our mission is community access to healthcare, so we will figure out a way to do it."
In fact, Putnam sees HIX and other reform challenges as a test of his hospital's mettle, and other community healthcare providers like his.
"We were here before Medicare existed. We've been through a lot," he says. "We are not talking about organizations that sway with the wind. We act like an umbrella. We still serve the patients regardless of which direction the wind and rain are coming from. We have a lot of history behind us that we have to adapt our organization to fit whatever the rules are and still be able to provide good care for our patients. Everybody who has been in healthcare for a long time realizes that. We walk down the hallways of this organization and have the pictures of the people in the 1930s and 1940s who delivered care and faced their own challenges. This is our time."
Most health insurers say they will take part in health insurance exchanges despite concerns about how the programs will function, technical barriers, and the health status of participants. Meanwhile, a federal study finds that premiums will cost less than originally expected and selection will be broad.
Nearly 70% of health insurance executives responding in a study released today say they will take part in health insurance exchanges despite widespread concerns about how the programs will function, stubborn technical barriers, and the health status of the people they will be covering.
The PwC study, titled Health Exchanges: Open for Business [PDF], found that the access to potentially millions of new customers on the individual market and a fear of being left behind if these exchanges succeed are overcoming the reservations that many health insurance executives have expressed.
The six-month enrollment period for the exchanges—a key component of the Patient Protection and Affordable Care Act—starts on Oct. 1, and coverage begins on Jan. 1, 2014.
"With open enrollment about to begin, large national insurers and new players, some from other industries, are jockeying for position in the new exchange market," Ceci Connolly, managing director of PwC's Health Research Institute, said in prepared remarks. "Investment in retention programs will be crucial to securing the loyalty of a new crop of technologically savvy buyers. Companies should think beyond initial implementation challenges and focus on building a meaningful customer experience, with an eye on cost reduction and personalized communication."
HRI surveyed more than 100 insurance executives about the exchanges and found that:
69% plan to offer coverage on the exchanges, suggesting the rising significance of this new business opportunity
10 of 18 national health insurer executives said they won't offer exchange coverage in all the states where they now have business, and 50% expected to enter additional states after 2014
63% said technology integration and 61% said coordination of subsidies were major barriers to implementation
34% of insurers said understanding newly eligible customers was a major barrier to implementation, suggesting they may not thoroughly understand the challenges associated with attracting and maintaining this new group of buyers armed with the ability to choose—a major shift from the wholesale approach many insurers are used to
91% expect that premium costs, followed by total out-of-pocket costs, will be what consumers care about most
Industry and consumer experts expect that personalized communication, tangible rewards, health management programs, and brand recognition will be factors in consumer choices
Robert Zirkelbach, spokesman for America's Health Insurance Plans, says health plans are entering the exchanges despites significant unknowns: mainly the prohibition against denying coverage to people with pre-existing conditions, and whether young and healthy people will sign up.
"Adverse selection is a huge issue," Zirkelbach told HealthLeaders Media. "The broad agreement is that for the new exchanges to work there needs to be broad participation among young healthy people to offset the cost of those who are older and have high healthcare costs. That is why our industry has been so focused on the issue of affordability. If it is not affordable and young healthy people decide not to purchase, these exchanges won't work."
Zirkelbach says the uncertainty will be mitigated somewhat by federal backstops such as a three-year reinsurance program that is designed to temporarily offset highest-cost enrollees and provide some stability for the plans in the start-up phase.
While there are bound to be glitches when the enrollment period begins, Zirkelbach says many of the plans that will participate in the exchanges have gained relevant experience with the launch of the Medicare Part B program.
"Obviously the exchanges are larger, but when the Medicare Part B program was implemented there were problems, and it was our members who stepped up and helped fix problems while at the same time helping seniors navigate the system to find the right kind of drug coverage," he says. "That is the role we are going to play in the open enrollment for new exchanges."
Also today, the Department of Health and Human Services released a report finding that consumers in most states will be able to choose from an average of 53 health plans in the exchanges, and that most will have a choice of at least two different insurers or more. Premiums nationwide will be around 16% lower than originally expected—with 95% of the eligible uninsured living in states with lower-than-expected premiums—even before taking into account financial assistance.
"We are excited to see that rates in the marketplace are even lower than originally projected," HHS Secretary Kathleen Sebelius said during a media call on Tuesday afternoon. "In the past, consumers were too often denied or priced out of quality health insurance options, but thanks to the Affordable Care Act, consumers will be able to choose from a number of new coverage options at a price that is affordable."
HHS says its report shows that people living in the 36 states where HHS will fully or partly run the health insurance Marketplace—which is HHS's term for the federally operated exchanges—will have an average of 53 qualified health plan choices. Plans in the Marketplace will be categorized as gold, silver, or bronze, depending on the share of costs covered. Young adults will also have the option of purchasing a "catastrophic" plan, increasing their number of choices to 57 on average. About 95% of consumers will have a choice of two or more health insurance issuers, often many more. About one in four of these insurance companies is offering health plans in the individual market for the first time in 2014.
The average premium nationally for the second-lowest cost silver plan will be $328 before tax credits, or 16% below projections based on Congressional Budget Office estimates. About 95% of uninsured people eligible for the Marketplace live in states where their average premiums are lower than projections. And states with the lowest premiums have more than twice the number of insurance companies offering plans than states with the highest premiums, HHS says.
