Nearly a third of health plans on the federal exchanges don't yet have a quality rating — including all the plans in Iowa, Kansas and Nebraska.

This article was first published on Friday, November 1, 2019 in Kaiser Health News.

By Lauren Weber and Phil Galewitz

ST. LOUIS — As millions of Americans start shopping Friday for individual health insurance for 2020, they will see federal ratings comparing the quality of health plans on the Affordable Care Act's insurance marketplaces.

But Christina Rinehart of Moberly, Mo., who has bought coverage on the federal insurance exchange for several years, won't be swayed by the new five-star rating system.

That's because only one insurer sells on the exchange where the 50-year-old former public school kitchen manager lives in central Missouri. Anthem Blue Cross Blue Shield in Missouri was not ranked by the Centers for Medicare & Medicaid Services.

"I'm pleased with the service I get with that and the coverage I have," she said, noting she focuses on cost and whether her medications and checkups are covered.

Rinehart's case illustrates one reason why the star ratings are unlikely to play a big role in people's decision-making for the first year of the national rollout. Nearly a third of health plans on the federal exchanges don't yet have a quality rating — including all the plans in Iowa, Kansas and Nebraska. Only one insurer is available in nearly a quarter of counties across the U.S. And consumers may not find the information behind the star ratings valuable without additional details, insurance experts say.

Across Missouri, Cigna is the only one of seven insurers to get ratings. The others have not yet been in the marketplace for the three years needed to merit a score.

Missouri is one of eight states that don't have any health plans that earned at least three stars. The others are Iowa, Kansas, Nebraska, Nevada, New Mexico, West Virginia and Wyoming. States with the most three-star or higher health plans are New York (12), Michigan (10), Pennsylvania (9), Massachusetts (8) and California (7).

The star ratings are largely new to the federal exchanges, which operate in 39 states. About 80% of plans in the federal marketplaces earned three or more stars overall, CMS said. Only 1% earned five stars.

The new federal star ratings are based on three main areas: evaluations of the plans' administration, such as customer service; clinical measures that include how often the plans provide preventive screenings; and surveys of members' perception of their plan and its doctors.

Ratings can be viewed at healthcare.gov, where consumers review plans' benefits and prices. Open enrollment runs from Friday through Dec. 15 for the federal exchange states, though enrollment lasts longer in the District of Columbia and most of the 11 states that operate their own marketplaces.

What Health Care Shoppers Need To Know

WHAT: The federal ratings for health care plans sold on the Affordable Care Act exchanges can be viewed at healthcare.gov, where consumers review plans' benefits and prices.

WHEN: Open enrollment runs from Friday, Nov. 1, through Dec. 15 for the federal exchange states, though enrollment lasts longer in most of the 12 states that run their own marketplaces.

Last year, about 11.4 million people bought coverage on all the exchanges, with more than 80% getting federal subsidies to lower their premiums.

The good news for consumers is premium prices on the federal exchanges are dropping by about 4% on average for 2020.

And consumers generally will have a wider array of choices as more companies enter the markets. Nationally, the average number of health plan choices per customer has risen from 26 to 38, according to Joshua Peck, co-founder of Get America Covered, a nonprofit that helps people enroll and find coverage. Missouri, for example, will have 28 plans from its seven insurers, he said, up from 14 this past year.

Jodi Ray, who runs Florida's largest patient navigator program as director of Florida Covering Kids & Families at the University of South Florida, is skeptical consumers will use the new ratings. Instead, she said, they will likely focus first on whether their doctor is on the plan, if their medications are covered, the size of the deductible and the monthly costs.

"The star ratings may fall out the door at that point," she said.

Many of the states that operate their own exchanges have already offered quality ratings, which were required under the ACA. California's insurance exchange has been providing quality ratings for several years, though it's unclear how much weight consumers give them.

"They have a limited effect on consumers but have a significant effect on health plans," said Peter Lee, executive director of Covered California, the state's insurance exchange. "It does tip health plans to focus on what they can do to improve care, and I think that is a positive effect."

Kaiser Permanente (which is not affiliated with Kaiser Health News) is the only insurer in the California exchange to garner the maximum five stars, Lee said. It also has the most enrollment of any plan in the state's exchange. But, he noted, the plan has a lower share of the enrollment in Southern California partly because its prices are higher compared with rival insurers, indicating low cost may trump high rankings in attracting enrollees.

"It's good news that nationally the federal marketplace is putting quality data out there for consumers," Lee said. Still, he added, customers would want to see the specific criteria that matter to them, such as how well plans care for patients with diabetes. Currently, that data is not immediately accessible for consumers at healthcare.gov.

Consumers tend to stick with their insurer even when prices and benefits change, said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, the nation's largest public health philanthropy. "People think changing health insurance plans is a huge pain and they don't know if things will get better or worse." But, she added, "people respond to consumer ratings and reviews."

The federal government already uses star ratings to help consumers choose a Medicare Advantage plan as well as compare hospitals. It began testing the exchange ratings in a handful of states over the past two years.

Heather Korbulic, executive director of the Nevada health exchange, worries the ratings could be steered by a relatively small number of member surveys. "It's such a narrow sample," she said, noting one plan's rating was partly based on just 200 member reviews.

Even though many counties have only one insurer in 2020 ― most of them rural areas or clustered in the Southeast ― the number of enrollees with access to just one insurer is falling to 12% next year from 20% now.

States that have not expanded Medicaid see premiums that are 7% higher than states that have, according to a 2016 study from the U.S. Department of Health and Human Services.

"If you look at Arkansas, they've got nice competition in their marketplace, but they've also expanded Medicaid," Watson said. "We look a lot like Mississippi, which is struggling to get insurance in rural counties."

That leaves people, like Rinehart, stuck with one insurer.

Rinehart remains loyal to Anthem particularly after it helped her get care and deal with the costs of suffering four heart attacks in 24 hours nearly three years ago. She's thrilled Anthem's prices are down slightly for 2020.

"I wasn't able to afford insurance before [the Affordable Care Act]," she said, "so it was a blessing to have."

Lauren Weber: LaurenW@kff.org, @LaurenWeberHP

Phil Galewitz: pgalewitz@kff.org, @philgalewitz

In a tight labor market, offering a more generous plan with a lower deductible can be an attractive recruitment tool.

This article was first published on Tuesday, October 29, 2019 in Kaiser Health News.

By Michelle Andrews

Everything old is new again. As open enrollment gets underway for next year's job-based health insurance coverage, some employees are seeing traditional plans offered alongside or instead of the plans with sky-high deductibles that may have been their only choice in the past.

Some employers say that, in a tight labor market, offering a more generous plan with a deductible that's less than four figures can be an attractive recruitment tool. Plus, a more traditional plan may appeal to workers who want more predictable out-of-pocket costs, even if the premium is a bit higher.

That's what happened at Digital River, a 650-person global e-commerce payment processing business based in Minnetonka, Minn.

Four years ago, faced with premium increases approaching double digits, Digital River ditched its traditional preferred provider organization plan in favor of three high-deductible plans. Each had different deductibles and different premiums, but all linked to health savings accounts that are exempt from taxes. This year, though, the company added back two traditional preferred provider plans to its offerings for workers.

Even with three plan options, "we still had employees who said they wanted other choices," said KT Schmidt, the company's chief administrative officer.

Digital River isn't the only company broadening its offerings. For the third year in a row, the percentage of companies that offer high-deductible plans as the sole option will decline in 2020, according to a survey of large employers by the National Business Group on Health. A quarter of the firms polled will offer these plans, sometimes called consumer-directed plans, as the only option next year, down 14 percentage points from two years ago.

That said, consumer-directed plans are hardly disappearing. Fifty-eight percent of covered employees worked at companies that offered at least one high-deductible health plan in 2019, according to an annual survey of employer health benefits released by the Kaiser Family Foundation last month. That was second only to the 76% of covered workers who were at firms that offered a PPO plan. (KHN is an editorially independent program of the foundation.)

When Digital River switched to all high-deductible plans for 2016, the firm put some of the $1 million it saved into the new health savings accounts that employees could use to cover their out-of-pocket expenses before reaching the deductible. Employees could also contribute to those accounts to save money for medical expenses. This year the deductibles on those plans are $1,850, $2,700 and $3,150 for single coverage, and $3,750, $5,300 and $6,300 for family plans.

The company put a lot of effort into educating employees about how the new plans worked, said Schmidt. Premiums are typically lower in high-deductible plans. But under federal rules, until people reach their deductible, the plans pay only for specified preventive care such as annual physicals and cancer screenings and some care for existing chronic conditions.

Enrollees are on the hook for everything else, including most doctor visits and prescription drugs. In 2020, the minimum deductible for a plan that qualifies under federal rules for a tax-exempt health savings account is $1,400 for an individual and $2,800 for a family.

As their health savings account balances grew, "more people moved into the camp that could see the benefits" of the high-deductible strategy, Schmidt said. Still, not everyone wanted to be exposed to costs upfront, even if they ended up spending less overall.

"For some people, there remained a desire to pay more to simply have that peace of mind," he said.

Digital River's PPOs have deductibles of $400 and $900 for single coverage and $800 and $1,800 for families. The premiums are significantly more expensive than those of the high-deductible plans.

In the PPO plan with the $400/$800 deductible, the employee's portion of the monthly premium ranges from $82.37 for single coverage to $356.46 for an employee plus two or more family members. The plan with the $2,700 deductible costs an employee $21.11 for single coverage and the $5,300 deductible plan costs $160.29 for the employee plus at least two others.

But costs are more predictable in the PPO plan. Instead of owing the entire cost of a doctor visit or trip to the emergency room until they reach their annual deductible, people in the PPO plans generally owe set copayments or coinsurance charges for most types of care.

When Digital River introduced the PPO plans this year, about 10% of employees moved from the high-deductible plans to the traditional plans. Open enrollment for 2020 starts later this fall, and the company is offering the same mix of traditional and high-deductible plans again for next year.

Adding PPOs to its roster of plans not only made employees happy but also made the company more competitive, Schmidt said. Two of Digital River's biggest competitors offer only high-deductible plans, and the PPOs give Digital River an edge in attracting top talent, he believes.

According to the survey by the National Business Group on Health, employers that opted to add more choices to what they offered employees typically chose a traditional PPO plan. Members in these plans generally get the most generous coverage if they use providers in the plan's network. But if they go out of network, plans often cover that as well, though they pay a smaller proportion of the costs. For the most part, deductibles are lower than the federal minimum for qualified high-deductible plans.

Traditional plans like PPOs also give employers more flexibility to try different approaches to improve employees' health, said Tracy Watts, a senior partner at benefits consultant Mercer.

"Some of the newer strategies that employers want to try just aren't [health savings account] compatible," said Watts. The firms might want to pay for care before the deductible is met, for example, or eliminate employee charges for certain services. Examples of these strategies could include direct primary care arrangements in which physicians are paid a monthly fee to provide care at no cost to the employee, or employer-subsidized telemedicine programs.

The so-called Cadillac tax, a provision of the Affordable Care Act that would impose a 40% excise on the value of health plans that exceed certain dollar thresholds, was a driving force behind the shift toward high-deductible plans. But the tax, originally supposed to take effect in 2018, has been pushed back to 2022. The House passed a bill repealing the tax in July, and there is a companion bill in the Senate.

It's unclear what will happen, but employers appear to be taking the uncertainty in stride, said Brian Marcotte, president and CEO of the National Business Group on Health.

"I think employers don't believe it's going to happen, and that's one of the reasons you're seeing [more plan choices] introduced," he said.

Michelle Andrews: andrews.khn@gmail.com, @mandrews110

A handful of states are offering alternatives to get more enrollees into jobs to lift them out of poverty and off Medicaid.

This article was first published on Monday, October 28, 2019 in Kaiser Health News.

By Phil Galewitz

 Under pressure from the Republican-controlled Pennsylvania legislature to require Medicaid recipients to work as a condition for coverage, state health officials have devised a gentler approach to getting beneficiaries into jobs.

Starting early next year, the Pennsylvania Medicaid agency under Democratic Gov. Tom Wolf will ask people when they enroll if they want job training assistance. It will then require its private Medicaid managed-care organizations to connect those who want help to local employment specialists and follow up to make sure they got it.

Teresa Miller, the state human services secretary, predicts the strategy will get better results than strict work requirements. The Trump administration has approved requiring work in nine states, with requests from nine others pending. Arkansas is the only state to implement the requirements, and more than 18,000 enrollees there lost coverage from June 2018 to March 2019 — with little sign many found jobs.

Since then, a federal judge struck down the work requirements in Arkansas, Kentucky and New Hampshire. The Trump administration and the states are appealing the decision.

"I worry that, with its reporting rules, work requirements result in fewer people covered by Medicaid, and that is not our goal," Miller said. "Our goal is to try to get people out of poverty. If you take access to health care away for people not working, I'm not sure how that helps people get a job."

A handful of states are offering alternatives to get more enrollees into jobs to lift them out of poverty and off Medicaid, the federal-state health program for low-income residents.

In Montana, about 32,000 of the 95,000 adult enrollees who gained coverage when the state expanded Medicaid in 2016 have received employment services from the state, including 4,200 who received one-on-one employment training services.

In August, Louisiana began a pilot program to train Medicaid enrollees for jobs such as a nursing assistant, commercial driver and forklift operator. It expects 50 people to complete the training this year at a community college.

More states are expected to follow. "While currently only a small number of states are starting to more directly connect Medicaid with the workforce training systems, this is a trend that will soon expand to many more states," said Steve Bella, a Bend, Ore., health and workplace consultant.

Bobbi Stammers, 37, enrolled in Montana's Medicaid in 2017 and said the state's job training assistance helped her get a nursing degree this year. The program paid thousands of dollars for her education expenses and supplies, including for textbooks and lab fees, and even covered the cost of fixing her car.

Two months after getting her degree, Stammers has a job with full benefits as a registered nurse, which means her family no longer needs Medicaid.

"I am so thankful I did this program; it really helped me get through school," said Stammers, of Charlo, Mont.

She used student loans to pay tuition, but with her husband working as a self-employed truck driver, Stammers said, additional expenses were burdensome. "This program eased the way for sure," Stammers said.

Conservatives nationwide have pushed for work requirements since Medicaid expanded dramatically under the Affordable Care Act. That law allows states to use federal funds to provide coverage to all adults with incomes below 138% of the federal poverty level, or $17,230 for an individual. Before that, many states limited adult enrollment to pregnant women, parents and people with extremely low incomes.

Despite the focus on getting Medicaid enrollees into jobs, studies show most people on Medicaid already work, and many of the rest have some disability, go to school or are caring for a family member.

Connecting people with job training is part of a broader effort by some states to improve Medicaid enrollees' health beyond paying for doctor and hospital care, said Hannah Katch, a senior policy analyst with the Center on Budget and Policy Priorities, a left-leaning advocacy group. She said states are looking at other social determinants of health, including housing and food services.

Montana's effort has been successful, Katch said, because it surveys people about their job status and training needs and then uses caseworkers to get them into career programs. About 60% of Montana Medicaid enrollees surveyed said they are employed, and 70% expressed interest in learning about opportunities in part-time or full-time jobs. The top three barriers to employment were poor finances, a criminal conviction and lack of transportation, according to the surveys.

A study by the state found its job training program helped lead to a 6% increase in Medicaid expansion-eligible adults joining the workforce from 2016 to 2018.

Despite the success of Montana's voluntary program, conservative lawmakers earlier this year pushed through legislation requiring that the state apply to the Trump administration for a waiver to mandate that Medicaid enrollees find jobs to keep their coverage, as well as pay monthly premiums based on how long they are on the program.

Health policy experts in Montana fear the work requirement will unfairly punish people who fail to report their employment status.

"We are worried those who are working are going to be subject to some pretty strict reporting requirements in order to maintain their health coverage," said Heather O'Loughlin, co-director of research and development at the Montana Budget & Policy Center. "We know there will be a loss of coverage, leaving people in a worse position to take care of themselves."

Pennsylvania's effort to assess enrollees about their job training interest comes after the governor has twice vetoed legislation to enact work requirements. The legislature will take up the same bill this year.

Sen. David Argall, a Republican co-sponsor of the measure, said the state's effort on job training doesn't go far enough.

"What they are suggesting is a tiny step in the right direction, but we need to do so much more," Argall said.

"Everyone tells me we have tens of thousands of able-bodied Pennsylvania residents receiving Medicaid but not working, and we need to be more aggressive in encouraging them to reenter the workforce," he said. "We are not asking Great-Grandma to work in a coal mine. We are talking about guys in their 20s who need an extra push."

Phil Galewitz: pgalewitz@kff.org, @philgalewitz

Suit alleges that Group Health Cooperative claimed some patients were sicker than they were, and billed for medical conditions that patients didn't have.

This article was first published on Friday, October 18, 2019 in Kaiser Health News.

By Fred Schulte

Group Health Cooperative in Seattle, one of the nation's oldest and most respected nonprofit health insurance plans, is accused of bilking Medicare out of millions of dollars in a federal whistleblower case.

Teresa Ross, a former medical billing manager at the insurer, alleges that it sought to reverse financial losses in 2010 by claiming some patients were sicker than they were, or by billing for medical conditions that patients didn't actually have. As a result, the insurer retroactively collected an estimated $8 million from Medicare for 2010 services, according to the suit.

Ross filed suit in federal court in Buffalo, N.Y., in 2012, but it remained under a court seal until July and is in the initial stages. The suit also names as defendants two medical coding consultants, consulting firm DxID of East Rochester, N.Y., and Independent Health Association, an affiliated health plan in Buffalo, N.Y. All denied wrongdoing in separate court motions filed late Wednesday to dismiss the suit.

The Justice Department has thus far declined to take over the case, but said in a June 21 court filing that "an active investigation is ongoing."

The whistleblower suit is one of at least 18 such cases documented by KHN that accuse Medicare Advantage managed-care plans of ripping off the government by exaggerating how sick its patients were. The whistleblower cases have emerged as a primary tool for clawing back overpayments. While many of the cases are pending in courts, five have recovered a total of nearly $360 million.

"The fraudulent practices described in this complaint are a product of the belief, common among MA organizations, that the law can be violated without meaningful consequence," Ross alleges.

Medicare Advantage plans are a privately run alternative to traditional Medicare that often offer extra benefits such as dental and vision coverage, but limit choice of medical providers. They have exploded in popularity in recent years, enrolling more than 22 million people, just over 1 in 3 of those eligible for Medicare.

Word of another whistleblower alleging Medicare Advantage billing fraud comes as the White House is pushing to expand enrollment in the plans. On Oct. 3, President Donald Trump issued an executive order that permits the plans to offer a range of new benefits to attract patients. One, for instance, is partly covering the cost of Apple Watches as an inducement.

Group Health opened for business more than seven decades ago and was among the first managed-care plans to contract with Medicare. Formed by a coalition of unions, farmers and local activists, the HMO grew from just a few hundred families to more than 600,000 patients before its members agreed to join California-based Kaiser Permanente. That happened in early 2017, and the plan is now called Kaiser Foundation Health Plan of Washington. (Kaiser Health News is not affiliated with Kaiser Permanente.)

In an emailed statement, a Kaiser Permanente spokesperson said: "We believe that Group Health complied with the law by submitting its data in good faith, relying on the recommendations of the vendor as well as communications with the federal government, which has not intervened in the case at this time."

Ross nods to the plan's history, saying it has "traditionally catered to the public interest, often highlighting its efforts to support low-income patients and provide affordable, quality care."

The insurer's Medicare Advantage plans "have also traditionally been well regarded, receiving accolades from industry groups and Medicare itself," according to the suit.

But Ross, who worked at Group Health for more than 14 years in jobs involving billing and coding, said that from 2008 through 2010 GHC "went from an operating income of almost $57 million to an operating loss of $60 million. Ross said the losses were "due largely to poor business decisions by company management."

The lawsuit alleges that the insurer manipulated a Medicare billing formula known as a risk score. The formula is supposed to pay health plans higher rates for sicker patients, but Medicare estimates that overpayments triggered by inflated risk scores have cost taxpayers $30 billion over the past three years alone.

According to Ross, a GHC executive attended a meeting of the Alliance of Community Health Plans in 2011 where he heard from a colleague at Independent Health about an "exciting opportunity" to increase risk scores and revenue. The colleague said Independent Health "had made a lot of money" using its consulting company, which specializes in combing patient charts to find overlooked diseases that health plans can bill for retroactively.

In November 2011, Group Health hired the East Rochester firm DxID to review medical charts for 2010. The review resulted in $12 million in new claims, according to the suit. Under the deal, DxID took a percentage of the claims revenue it generated, which came to about $1.5 million that year, the suit says.

Ross said she and a doctor who later reviewed the charts found "systematic" problems with the firm's coding practices. In one case, the plan billed for "major depression" in a patient described by his doctor as having an "amazingly sunny disposition." Overall, about three-quarters of its claims for higher charges in 2010 were not justified, according to the suit. Ross estimated that the consultants submitted some $35 million in new claims to Medicare on behalf of GHC for 2010 and 2011.

In its motion to dismiss Ross' case, GHC called the matter a "difference of opinion between her allegedly 'conservative' method for evaluating the underlying documentation for certain medical conditions and her perception of an 'aggressive' approach taken by Defendants."

Independent Health and the DxID consultants took a similar position in their court motion, arguing that Ross "seeks to manufacture a fraud case out of an honest disagreement about the meaning and applicability of unclear, complex, and often conflicting industry-wide coding criteria."

In a statement, Independent Health spokesman Frank Sava added: "We believe the coding policies being challenged here were lawful and proper and all parties were paid appropriately.

Whistleblowers sue on behalf of the federal government and can share in any money recovered. Typically, the cases remain under a court seal for years while the Justice Department investigates.

Fred Schulte: fschulte@kff.org, @fredschulte