"The policy efforts in the HITECH/MACRA era, from technical requirements in EHR certification to payment incentives in APMs, did not deliver on the goal of national interoperability by 2018."—Journal of the American Medical Association
A new investigation from the Journal of the American Medical Association (JAMA) has posed two questions: how are hospitals progressing on EHR interoperability and do alternative payment models (APM) help facilitate. The answers? Slowly and no.
Less than half of the nearly 4,000 hospitals studied between 2014–2018 have achieved interoperability across all domains. Hospitals cited “technical and governance challenges”—including EHR vendor nuances and none of which APMs alone can solve. Payers must take note given the proliferation of not only APM models but health-plan-driven point-of-care solutions that generate data and require EHR workflow integration to deliver savings and efficiency at scale.
The JAMA study was grounded in existing research and measures—specifically the American Hospital Association (AHA) IT Supplement which, since 2014, has tracked the interoperability domains defined by the HHS Office of the National Coordinator for Health Information Technology (ONC). These are the ability to: query, send, receive, and integrate EHR data. As the JAMA results state: "Congress designated 2018 as the goal for nationwide interoperability, and policy makers hoped that aligning financial incentives via alternative payment models (APMs) would help achieve that goal."
The results
The JAMA researchers compared "interoperability progress … between hospitals that did and did not participate in APMs." The study spanned three APM types: patient-centered medical homes (PCMH), bundled payments, and accountable care organizations (ACO). The study included diverse hospitals to prevent bias based on size, location, EHR vendor, and other factors. The interoperability domains themselves were "functionality-based … [and] technology agnostic."
Only 45% of hospitals demonstrated interoperability across all four domains. And while interoperability was higher by 2018 for APM hospitals (55.4%) versus non-APM hospitals (37.2%), these results were lower than expected and the pace of interoperability growth was similar for non-APMs. While APMs did contribute to a small increase in "interoperability engagement," they fell well short of Congress’ expectations for both nationwide interoperability and the role innovative financial incentives would play to help achieve it.
The ability to query for and integrate data lagged the most—domains associated with unplanned care and more advanced information exchange, respectively. Unplanned care is often the most expensive and the most likely to be not only out of network but beyond the reach of an APM contract.
Why APMs did not accelerate progress
The assumption was that there would be a natural connection between growing interoperability and "risk-bearing population-based and episode-based APMs" (e.g., PCMHs, bundled payments, and ACOs). The JAMA study, however, draws a direct link between weak/non-aligned incentive design and hospital interoperability barriers, specifically:
Weak APM incentives are not sufficient to drive related interoperability investment or behavior change.
Competing focus on other initiatives, preventing APMs from having a stronger role in driving improved interoperability.
While care coordination is common to APMs and interoperability alike, the study notes it doesn't generate sufficient ACO cost savings or hospital revenue to create a meaningful link.
"Technical and governance issues" were the most common interoperability barriers. Examples include cross-vendor data sharing, partners unable to receive data, and inability to match providers and patients across different data sets. The JAMA study concludes: "APM hospitals may encounter these barriers more often, as they have incentives to fill in information gaps for care coordination. This suggests that value-based payment models aligned financial incentives for sharing data, but technical barriers hampered interoperability progress."
How to make progress
Despite the disappointing results, it is unlikely the U.S. healthcare system would have made as much progress without federal mandates. These must continue, argue the JAMA authors, and through "ongoing 21st Century Cures policy making"—including creating application programming interface standards (API) that help reduce friction between different EHR vendor systems.
API is an example of the patchwork of EHR workarounds that have proliferated since the 2009 HITECH Act (Health Information Technology for Economic and Clinical Health) first mandated EHR adoption and interoperability. And understandably so. In technology, the first solution is rarely the best solution, and minimum viable products are needed to test solutions in a cost-effective way that can eventually be improved upon and scaled.
But just as data alone is not power, connectivity alone is not progress. It is not a given that more accessible information leads to better decisions and thus, downstream improvements to quality, access, affordability, and equity. Similarly, better opportunities to build interoperability through APMs will only be as good as the incentives themselves.
The DoJ and AGs from New York and Minnesota are hoping to block the proposed acquistion, fearing it will raise costs for consumers.
Venture capitalist Elad Verbin has said, "He who controls the algorithm controls the future." They who control the data behind the algorithm run a close second. Regulators eyeing UnitedHealth Group's (UHG) planned acquisition of Change Healthcare know that. Now, after months of reviewing the $8 billion proposed deal, the U.S. Department of Justice (DOJ)—joined by New York and Minnesota—have sued to block it. The suit claims that the merger would allow UHG to expand its already substantial power, while hobbling competitors, and creating monopolies in multiple markets.
The suit and its claims
In their suit, the DOJ and two State Attorneys General (AG) outline the "anti-competitive effects" of the proposed merger: that it would give UHG unprecedented access to competitor claims data while limiting rivals' access to the claims-editing capabilities that Change Healthcare (Change) provides and/or increasing the costs for those services.
The suit alleges that these factors would help United create a monopoly in three markets: first-pass claims editing, national commercial health insurance accounts, and large-group employer accounts. UHG is the leading provider of claims-editing solutions, second only to Change and its ClaimsXten product.
The suit continues that having access to competitors' proprietary claims-editing would give UHG "the ability to disadvantage its rivals, including by mimicking their innovative policies to make their rivals' healthcare plans less attractive to customers"—adding that "[a]n insurer's custom edits also provide a roadmap to its health plan and reimbursement policies and its risk allocation methodologies."
Concerning electronic data interchange (EDI), the DOJ and AGs note: "Through ownership of Change's EDI pipes, … United would have access and the right to use the claims data of health insurer rivals." The suit suggests that UHG could take the artificial intelligence and machine learning (AI/ML) capabilities that it already applies to its own claims data to that of its competitors.
Anti-trust breeds mistrust
Additionally, and without equivocation, the suit expresses little confidence that UHG would create firewalls for its competitors' data and claims-editing intelligence. "Efforts to cordon off a health insurance rival's competitively sensitive information obtained from Change's EDI clearinghouse and first-pass claims editing solutions through information firewalls would be insufficient to protect against the risk of United accessing and using this information." The suit adds: "This is especially true given … United's longstanding interest in acquiring this competitively sensitive data" and the permeable boundaries between Optum, UHG, and UnitedHealthcare that allow senior executives to move frequently across the companies and engage in "enterprise-wide planning."
In the announcement that New York would join the DOJ's action, State Attorney General Letitia James commented: "New Yorkers need affordable healthcare, not health insurance companies primarily concerned with market dominance."
Strong support from the AHA
Following the DOJ's announcement, the American Hospital Association (AHA) voiced its support. "Challenging this proposed combination was the right thing to do to prevent untold competitive harm for patients and health care providers," noted Melinda Hatton, vice president and general counsel, in the organization's statement. In adding that the UHG-Change merger "would have permitted a massive concentration of sensitive health care data in the hands of a single, powerful owner with an inherent conflict of interest," the AHA continued its ongoing opposition to the deal.
Following the UHG-Change announcement in January 2021, the AHA requested that the DOJ investigate the merger. Following its March 2021 letter, the DOJ requested additional information, which began multiple changes to the merger finalization. Another AHA letter, this one in August 2021, added that "it is highly unlikely that any remedy will preserve the substantial level of competition between the parties."
No remedy in sight
One of the bases for any anti-trust suit is that there are insufficient remedies to prevent a resulting monopoly in impacted markets. Two remedies for the UHG-Change merger would require that another first-claims pass company and/or EDI clearinghouse be able to effectively complete with OptumInsight's new combined company. The suit notes the "high barriers to entry, such as technical capabilities … [and] the resources needed" to create comparable, affordable access to competitor data and claims editing.
Another remedy could have been Change's proposed $1 billion sale of ClaimsXten. The DOJ acknowledges this strategy but concludes overall no remedy is sufficient: "United has proposed divesting Change's ClaimsXten business in an attempt to remedy the anticompetitive effects of this merger. Change has had some discussions with potential buyers but has not entered into a purchase agreement. Defendants have not proposed any remedy that would preserve competition and prevent the anticompetitive effects of this merger."
Awaiting response
Collectively, the DOJ, New York, and Minnesota AGs summarize the merger impact as follows: "United would be in a position to identify and poach profitable innovations in plan design, benefits, provider network design, reimbursement design, and coverage terms from its competitors without bearing the cost and development risks. Faced with this prospect, health insurer rivals would forgo innovation rather than subsidize United in competition against them."
The Global and Professional Direct Contracting Model will phase out December 31, 2022.
One model will be in and another two out as CMS and the Biden-Harris Administration seek to shape a health-equity-informed model of accountable care.
On February 24, CMS announced ACO REACH—Accountable Care Organization Realizing Equity, Access, and Community Health—as the federal agency designs a new decade of value-based innovation. CMS Administrator Chiquita Brooks-LaSure states that "CMS, through the Innovation Center, is testing new models of health care service delivery and payment to improve the quality of care that people receive, including those in underserved communities."
The existing Global and Professional Direct Contracting Model (GPDC) will phase out December 31, 2022, redesigned to create ACO REACH. A similarly named program, the Geographic Direct Contracting ("Geo") Model, was immediately terminated as part of the ACO REACH announcement.
In a Fact Sheet describing ACO REACH, CMS states it will use "an innovative payment approach to better support care delivery and coordination for patients in underserved communities and will require that all model participants develop and implement a robust health equity plan to identify underserved communities and implement initiatives to measurably reduce health disparities within their beneficiary populations."
Better for beneficiaries
CMS' Fact sheet on the new model outlines multiple beneficiary and provider benefits, in addition to stricter requirements. ACO REACH is designed to extend Medicare accountable care to more underserved beneficiaries while giving them a greater voice in their care and in ACO governance as well as possible expanded benefits—including but not limited to telehealth, post-discharge home visits, and lower cost-sharing.
A larger focus on health equity is designed to benefit Medicare members, in quality and in number. ACO REACH will include five new policies:
Health Equity Plan Requirement
Health Equity Benchmark Adjustment
Health Equity Data Collection Requirement
Nurse Practitioner Services Benefit Enhancement
Health Equity Questions in Application and Scoring for Health Equity Experience
Of note, the benchmark adjustment will include whether a person has Dual Medicaid Status, bridging additional gaps for Medicare beneficiaries who also qualify for Medicaid. In addition, REACH ACOs must create Health Equity Plans to identify and address disparity risks.
Greater provider privileges and responsibilities
Providers will also play an enhanced role but with more stringent requirements for ACO REACH entry, monitoring, performance, and transparency. This includes current GPDC participants, who must apply for, but are not guaranteed, a spot in the new program. For each ACO chosen, providers must have at least a 75% controlling interest.
For all providers, ACO REACH will require downside risk: 50% or 100%, associated with partial or global capitation. Three types of groups may participate: Standard ACOs with Medicare experience, New Entrant ACOs to allow for new but less-experienced players (like GPDC), and High Needs Population ACOs to ensure groups caring for smaller but more complex populations are included.
Providers are also subject to new risk-adjustment requirements, which expand beyond the GPDC's already stringent model. (CMS published a model comparison as part of its announcement.) To control risk-coding manipulation and payment inflation, CMS is creating a "zero-sum environment" that caps risk score growth at +/- 3% while locking in average scores. Higher payments due to coding manipulation have long been an issue of the Medicare Advantage program, with CMS also looking at risk-adjustment within the marketplace. For ACO REACH, CMS believes that its Coding Intensity Factor approach will provide "100 percent protection to Medicare against inflated payments."
To balance these new requirements, CMS states that it will provide improved "tools and resources." ACO REACH will "empower doctors and other health care providers to better coordinate and improve the quality of care they provide for patients," who will receive "greater individualized attention."
What's next for current GPDC participants?
GPDC's phase-out gives current participants the opportunity to apply for ACO REACH. But will they be eligible, or chosen? There are 53 plan year 2021 GPDC participants—called Direct Contracting Entities (DCE)— including 16 new entrants ranging from single- to multi-state entities. There are also at least two health-plan-led participants: Clover Health Partners and the Humana DCE.
Both Clover and Humana are currently participating in GPDC under the Primary Care Capitation and Advanced Payment Option risk-sharing options and are offering all eight possible Beneficiary Engagement Incentives (BEI), including skilled nursing and home health waivers, post-discharge and care management home visits, telehealth, hospice, and affordability support through Part B cost sharing and chronic disease management rewards.
This information is part of CMS' promised increased transparency, which will begin with current GPDC participants and continue and expand with ACO REACH.
Of these plans, Clover tweeted support for the announcement, indicating ACO REACH will make "VBC [value-based care] accessible to more physicians."
CMMI's next decade has begun
ACO REACH represents one of the first major accountable care changes since CMS' CMMI announced a strategy refresh in October 2021. The refresh includes five objectives, which all appear to components of ACO REACH:
Drive Accountable Care
Advance Health Equity
Support Care Innovations
Improve Access by Addressing Affordability
Partner to Achieve Health System Transformation
To some degree, ACO REACH is an example of what all new administrations seek to do: create distance from their predecessors while defining new footprints that don't disrupt what is currently working. But can that be said for CMS and CMMI ACOs and other advanced payment models?
CMMI reports that of the 50-plus models it has tested, only six "generated statistically significant savings to Medicare and to taxpayers." In June 2021, MedPAC reported similar results, including for CMS' first ACO model, the Medicare Shared Savings Program. All eyes will be on CMMI and CMS as to whether the refresh and ACO REACH can achieve what prior models have not.
"We also encourage HHS to work with a broader set of stakeholders to understand which levers may have the biggest impact on health equity, especially when myriad health equity issues are … outside the control of QHPs," noted one rule respondent
HHS put health equity front and center in its annual Notice of Benefit and Payment Parameters (NBPP) rule for the marketplace. Two proposals would require plans to include healthcare disparities in their Quality Improvement Strategies (QIS) and become accredited in health equity. HealthLeaders examines these proposals—including HHS' associated request for equity data insights—and payer stakeholder response. Of note is a question that is not new to the rule and the responses it triggered: how will health equity be operationalized across healthcare's delivery and reimbursement systems?
Aligning equity and quality
If finalized, the disparities QIS inclusion would begin in 2023 and would be in addition to another ACA-required topic of each plan’s choosing: improving health outcomes, preventing hospital readmissions, improving safety and reducing medical errors, or promoting wellness and health. Per the NBPP, the QIS is intended to be a "continuous improvement process" that health plans use to define needs, set goals, and design incentives to help achieve. A CMS fact sheet notes that "[i]n PY2020, an estimated 60% of QHP issuer QIS submissions … did address health care disparities."
Health equity data, measures, and accreditation
Like all stakeholders, HHS is eager to develop a data-driven understanding of social determinants of health (SDOH) that improves clinical and non-clinical outcomes. In the NBPP, the agency requires plans to submit five new data variables while requesting input on broader SDOH data types, their value, collection barriers, and related incentives. Payer response to these five variables—ZIP code, race, ethnicity, and Individual Coverage Health Reimbursement Arrangement (HRA) and subsidy indicators—and how they would be used is discussed in this HealthLeaders article.
HHS desires balance between population-based and individualized SDOH programs and seeks to understand obstacles that impact payer equity accountability. A few of its questions from the rule include:
"What health conditions or outcome variables should CMS analyze to identify gaps in … health care services?
What are some of the ways that CMS could measure QHP issuers' progress toward advancing health equity?
Are there ways that CMS could incentivize QHP issuers to advance health equity outside of the QHP certification requirement, such as through other federal reporting requirements, including MLR reporting?"
Payer response
The payer community naturally supports health equity, with their NBPP responses ranging from "spirit of the law" support for NCQA Health Equity accreditation to noting state-based nuances that prohibit select SDOH data collection. The following summarizes notable quotes and/or recommendation from nine of the largest health plans or plan associations. Note: While Blues plan operator Health Care Services Corporation (HCSC) did submit a comment letter, it largely agreed with the Blue Cross Blue Shield Association (BSBSA) and commented only on risk provisions.
"Addressing challenges related to health equity … will require an enterprise-wide engagement for plans to take advantage of all policy and operational levers that they have at their disposal, across multiple lines of business. We expect to have additional information for CMS on these topics as the project continues to evolve."
One of AHIP's recommendations illustrates the complexity of the linkage between healthcare services, outcomes, and reimbursement:
"Social determinants interventions are not considered 'medical services' under medical loss ratio (MLR) calculations and thus are counted as administrative costs. Allowing issuers to treat SDOH interventions as medical services would allow issuers flexibility to address the social needs of enrollees to reduce the upstream causes of healthcare disparities, encourage investment in addressing SDOH, and promote the sustainability of these interventions."
The statistic that health outcomes are 20% clinical and 80% non-clinical has helped put SDOH on the map. But only by officially classifying its interventions as "medical" will health plans realize an MLR-based incentive to deliver.
To other payer community SDOH data recommendations, Anthem adds the United States Core Data for Interoperability (USCDI). The USCDI July 2021 update included the addition of SDOH to three of 19 data classes/elements:
Assessment and Plan of Treatment should include assessment of SDOH risk
Problems (documented condition, diagnoses, or event) should include SDOH conditions, including those identified via ZIP code
In addition to USCDI, BCBSA also recommends Gravity Project SDOH data collection and standardization as a "a multi-industry effort to reduce current barriers to integration of social risk data into clinical decision-making to improve health outcomes." AHIP had recommended the CDC’s Social Vulnerability Index (SVI).
Centene summarizes well the "common challenge for all insurers," namely the "lack of interoperable data infrastructure and inconsistent data standards, as well as low consumer response rates, [that] make it difficult to obtain and utilize the data necessary to readily identify how inequities are impacting our most vulnerable members."
While not supporting health equity certification, Cigna notes that it is currently pursuing NCQA Health Equity Accreditation for its California marketplace plans (offered on the nation's first state-based exchange).
CVS Health made the important point that health plans alone cannot achieve equity: "We also encourage HHS to work with a broader set of stakeholders to understand which levers may have the biggest impact on health equity, especially when myriad health equity issues are inherently tied to the provider workforce, the social safety net and other social issues, and are therefore outside the control of QHPs."
Kaiser indicated its "strong support" for including disparities as a required QIS element. Other plans recommended delayed implementation or argued that health equity could not be siloed from other quality dimensions. Kaiser further recommended that NCQA accreditation be optional and noted in marketplace listings to test its influence on consumer decisions.
UnitedHealthcare (UHC)
UHC stated that it would "welcome NCQA's new Health Equity Accreditation as a means to measure and demonstrate the impact of our programs." It specifically identified its SDOH data sources (Monthly Membership Report, Full Enrollment Data File, 834, and other supplemental files as well as provider data), but identified their limitations.
In general, payers are an informed community—helping to lead the way through their regulatory responses and initiatives like the Strategic Health Information Exchange Collaboration (SHIEC). The SHIEC is participating in the aforementioned Gravity Project from H7, which is also facilitating a Bulk FHIR interoperability standard that allows "push button" access to population health data that will "change what payers expect from providers."
Operationalizing health equity
Organizations like the Institute for Healthcare Improvement (IHI) predict more outcomes-based measurement, SDOH data stratification, and public reporting. Conversely, there is still the question of whether health equity should be a distinct dimension of health outcome categories or embedded within all. While the Institute of Medicine and some payers argue that equity cannot standalone, current IHI leadership has begun to suggest that health equity—in addition to "workforce well-being and safety"—are distinct parts of a new Quintuple Aim of healthcare.
Given these and other factors, expect extensive revisions to the NBPP rule before HHS finalizes it in May 2022. As a result of payer feedback, the agency is highly likely to delay requiring additional SDOH data collection or health equity accreditation.
"AI allows Highmark to detect and prevent suspicious activity more quickly, update insurance policies and guidelines, and stay ahead of new schemes and bad actors," says one plan executive.
For 2021, Highmark reported that its Financial Investigations and Provider Review (FIPR) saved $245 million in fraud, waste, and abuse (FWA) prevention. Highmark added this sum to its total FWA savings haul of almost $1 billion since 2017. And while artificial intelligence (AI) may have factored less in Highmark’s efforts in the beginning, it is now central—along with close and diverse partnerships within and outside of the payer’s organization.
The savings breakdown spanned multiple lines of business and included:
$152 million from employer-sponsored coverage
$49 million from BlueCard, which provides out-of-network access
$19 million from Medicare Advantage (MA)
$16 million from marketplace plans
$9 million from the Federal Employee Program
Highmark, a member of the Blue Cross Blue Shield Association, operates plans in Pennsylvania, West Virginia, and Delaware—which generated the bulk of the savings—as well as western and northeastern New York.
That the employer-based plans should generate the largest savings is not a surprise. Nor is FWA detection within an extended Blue Cross Blue Shield network. The question is how much of the savings can be attributed to the same providers contracted across programs, with the answer revealing the repeat offenders whose activity may be more intentional than accidental.
Another question is what coding and what does and does not constitute proper practice, particularly in the MA program. As MedPAC has reported: "Documenting additional diagnosis codes increases enrollees' risk scores, which both increases the monthly payment amount a plan receives and increases the rebate amount a plan uses to provide extra benefits to enrollees." Not surprisingly, MA risk scores are continually higher than those of original Medicare fee-for-service claims.
AI provides new tools
FWA is not unique to healthcare. It's not even unique to the claims process. But the growing use of AI to ferret out preventable cost losses is.
"AI allows Highmark to detect and prevent suspicious activity more quickly, update insurance policies and guidelines, and stay ahead of new schemes and bad actors," said Melissa Anderson, EVP and chief risk and compliance officer, in the company's press release.
Highmark provided the following additional detail to HealthLeaders: "Highmark's AI solutions work in concert with our claims adjudication systems and data warehouses. AI algorithms are applied to claims and identify unusual activity within claims. Once identified, the claims and billing providers are reviewed by Highmark's FIPR department. Investigations are opened accordingly to help mitigate future issues and remediate the identified concerns."
Partnership also key for FWA prevention
According to its press release, Highmark's FIPR partnerships include "health systems, public health officials, law enforcement and other health stakeholders."
Working with these external partners are more than 80 dedicated internal personnel plus numerous Highmark vendors.
The first line of defense in bending healthcare's cost curve is combating FWA. And even as payers and providers seek to strengthen their relationships and collaborate in new ways, identifying fraudulent claims will always part of a health plan's strategy.
As a recap, the HHS proposal included the following:
Requiring new data collection to support health equity
Mandating standardized plans and benefit design based on clinical evidence
A new two-stage risk-adjustment calculation model
Reinstating discrimination protections and network adequacy reviews
Requesting payer input on health equity program design and quality strategy alignment
This analysis will focus on the first three bullets. A summary of payer health equity recommendations and a more in-depth look at CMS' proposed risk-adjustment changes will appear in separate articles. The information below includes responses from: the Association for Community Affiliated Plans (ACAP), AHIP, Anthem, the Blue Cross Blue Shield Association (BCBSA), Centene, Cigna, CVS Health, Health Care Service Corporation (HCSC), Kaiser Permanente, and UnitedHealthcare (UHC).
Telehealth as a form of discrimination?
Health plan support for HHS non-discrimination protections was predictably and consistently positive.
The same cannot be said for other proposals nor HHS' head-scratching suggestion that zero-copay telehealth benefits could be inadvertently discriminatory by steering enrollees away from in-person service delivery. BCBSA commented most strongly here, stating:
"CMS appears to suggest that some delivery models are inherently superior to others and that steering patients to a preferred delivery model based on quality and efficiency considerations may be inherently discriminatory. Telemedicine … has proved an invaluable tool in expanding access to care in difficult circumstances. It is not appropriate in all circumstances, but encouraging its use when it is appropriate should not be seen as inherently discriminatory."
UHC and others strongly echoed this sentiment.
Support for the "why" of more data, but not the how or when
To bolster health equity analysis and program design, HHS wants health plans to submit the following additional variables:
ZIP code
Race and ethnicity
Individual Coverage Health Reimbursement Arrangements (HRA) and subsidy indicators
Payer stakeholders understand HHS' purpose but note the added burden of collecting not only more data but select variables in sufficient volume to be valuable and fairly included for updated risk adjustment. HHS' ability to extract this data and use it for broader purposes raised multiple data privacy and security concerns.
Most of the previously referenced stakeholders opposed this data collection and use until standards and availability can be normalized. BCBSA recommended that the government "support industry standardization efforts, such as the Gravity Project, to develop data standards and appropriate data use prior to setting any government mandates around demographic and social determinants of health (SDOH) data collections."
HCSC did not address the item and Kaiser supported it provided the data is accurate, reliable, and serves a unique purpose and benefit that outweighs collection burdens. UHC supports the collection of all proposed data points with three caveats: recommended delay until 2024 or later, no extraction of additional data or for expanded use, and no collection of HRA. Multiple respondents objected to the latter, citing lack of payer involvement in this data collection and the potential for it to "cause abrasion" with the employers who do collect it.
Plans object to standardized design
Plans and their associations generally disagreed with HHS' proposal that they should offer multiple standardized plans, some expanded, at all metal levels to make consumer shopping easier. Most of these stakeholders requested a delayed, modified, or optional implementation of these plans, noting that standardization could curb innovations that help lower premiums, meet unique market needs, and support value-based care (VBC).
Again, AHIP, Anthem, BCBSA, Centene, Cigna, CVS Health, and UHC generally objected. Some advised that standardized plans be limited to one metal and one option only—with AHIP and Centene recommending a single silver plan and Kaiser recommending an expanded bronze plan. All plans agreed that no standardized plans should be listed preferentially on HealthCare.gov.
CVS Health recommended "that HHS use existing tools to improve the consumer shopping and coverage experience before mandating standardized plan offerings," adding that the ACA never intended to "fully commoditize coverage" and noting that the emergence of new payers and benefit designs indicate that HHS is already doing what it needs to protect innovation and competition.
Evidence-based, but according to whom?
To further support non-discrimination, HHS proposed a benefit design standard that is "clinically based, that incorporates evidence-based guidelines into coverage and programmatic decisions, and relies on current and relevant peer-reviewed medical journal article(s), practice guidelines, recommendations from reputable governing bodies, or similar sources."
While the payer community acknowledged the value of clinical evidence, which plans already integrate to some degree in benefit design, none supported exactly as proposed. Most recommended optional or delayed implementation until 2023 (Cigna) or 2024 (Centene). Two plans had opposing recommendations—with Centene requesting specific clinical evidence guidelines while BCBSA stated that these were not for CMS to "further define." Kaiser noted that some clinical frameworks could drive improper utilization inadvertently.
Risk-adjustment
There were three primary components to HHS' risk-adjustment proposal, all designed to improve the risk-adjustment predictions that help distribute more funding to plans with higher-risk members. This analysis focuses on the new two-stage weighting model HHS wants to implement, believing that the existing one underestimates how many low-risk members each plan has.
Rule respondents were concerned about bias as well, but with different objections and conclusions. ACAP, AHIP, and Kaiser generally supported while UHC fully supported. Centene, Cigna, and CVS Health did not specifically oppose or address.
Anthem, BCBSA, and HCSC were all opposed on the grounds that the new model would actually increase adverse selection. BCBSA suggested the proposed adjustment would overfit predictions plan, adding that "a two-stage weighted approach is not a standard procedure for risk adjustment" and suggesting that current administrative adjustment "already addresses some of the underprediction" HHS is seeing.
One payer's differences
Kaiser was a bit of an outlier compared to its competitors. It appeared to express broader support for SDOH data collection and use, clinically based benefit design, and HHS' new risk calculations.
The plan stated it was "generally supportive of the standardized options proposed" and recommended finalizing the proposal" with no implementation delays but, as mentioned, for the expanded bronze plan only. It also stated: "Based on the analyses presented in the Technical Paper and in the proposed rule, we support including the two-stage weighted approach and the enrollment duration factor changes in the risk adjustment models starting with the 2023 benefit year." It was the only plan to express support this clearly.
These differences are perhaps no surprise. Among the respondents named in this feature, Kaiser is the only fully integrated payer-provider. It is the largest such private organization of this kind in the U.S., with an EHR system and an ability to control its membership profile that are the envy of the industry.
Next steps
Respondents noted that the comment period for the NBPP was shorter than normal due to the holidays. Several plans also called on the HHS to withdraw and replace its document. The regulatory process guarantees that HHS will have a lot of work on its hands if it is to finalize the rule this May.
"We honestly believe that solutions in healthcare cannot be proprietary ... The best ideas won't come from any one company," says the head of CareFirst BlueCross BlueShield's venture affiliate.
This week, HealthLeaders speaks with Ricardo Johnson, head of Healthworx—the innovation and venture capital (VC) arm of CareFirst BlueCross BlueShield. Johnson details the plan's approach to venture decisions and how the best investments are those that increase equity and affordability while benefiting the entire healthcare delivery system.
HealthLeaders: What is driving traditional stakeholders to make VC investments?
Ricardo Johnson: A few things, including for Healthworx and CareFirst specifically. The industry is tackling a broad base of problems and must be able to test solutions that meet critical need to reduce risk. To be a future-focused company and payer, we must identify how to get our hands on more levers of the healthcare journey. The levers that any one enterprise has are not enough to affect real change. Other stakeholders are feeling the same way and are investing in ways that are complementary to their business models.
HL: What is needed for these investments to succeed?
Johnson: You need a dedicated focus; you have to be left alone to do the work. Another aspect is making sure you are seeding fertile ground so that the opportunities you invest in are responsive to innovation and can scale. Even as you begin to scale, some investments might still fail so then, how do you pivot? It takes nimbleness within an organization that you have to build from culture and process.
All of this is what we're trying to do. Healthworx is still in its beginning phases. On the tech side, we believe we offer an incredible amount of data and experience, and we look for companies where we can add value.
HL: How does Healthworx decide what to invest in and is there such thing as a non-tech investment?
Johnson: It's hard to find a company that doesn't have a tech component. Most investments and partnerships have underlying platforms that are a core piece of their value proposition.
How we decide what to invest in depends on the solution presented and our members' needs. At CareFirst, affordability is our North Star. We believe nothing threatens equity, access, and quality as much as cost of care.
HL: What is a specific example of this focus?
Johnson: Last year, we put a lot of weight on how to get more care out of hospitals, giving access to a quality of care that is more affordable because it's not burdened by brick-and-mortar fixed costs.
We have levers to affect this and CloseKnit was one of the results. [Note: CloseKnit is CareFirst's 24/7 "virtual-first primary care practice" with services ranging from online support chats and prescription refill access to urgent and chronic care with pathways to in-person and specialty services.]
We knew we had to have our hands on the lever of primary care access. Even here, services you don’t typically think of as tech driven, like home health staffing, benefit from platforms and analytics.
HL: How does Healthworx decide what to invest in?
Johnson: We look at three things. Again, number one is affordability. Here we search for ways that tech can deliver, while bringing efficiency, value, and needed quality.
Number two, we look at the largest-cost areas; and number three, are we placing bets there and how are they working? We have many levers that affect affordability and [we] also want to test levers we don't currently have.
HL: What areas does Healthworx invest in?
Johnson: Healthworx invests through both VC and partnerships. For our VC investments, we usually invest in Series A, take an equity position, and have shared subject matter experts with CareFirst. Through 1501 Health [a partnership with LifeBridge Health], we provide an incubator for early-stage companies, providing some seed and pre-seed capital but investing more intellectual capital and resources to help them build their business models.
When we decide to partner, we do so with companies that are combining unique resources and assets to create their products, businesses, or joint ventures. This includes Cityblock and Union Blue, the latter being an example of a larger-scale partnership.
We honestly believe that solutions in healthcare cannot be proprietary so a big part of how we work is through partnership. The best ideas won't come from any one company.
[Note: Cityblock is a provider-payer partnership that delivers integrated care and non-clinical supports to communities in need. Union Blue is a labor-union-focused insurance product jointly offered by payers CareFirst and Highmark. The Healthworx portfolio also includes numerous tech-based investments to support maternal and child health, medication adherence, mental health and multiple B2B companies that support data and workflow integration. The Healthworx podcast features more companies including Fabric Health, which uses the laundromat to connect with people about their healthcare and other needs.]
HL: What does the decision-making and assessment cycle look like?
Johnson: We start with an if-then process of whether to invest, partner, or build. And we created Healthworx to allow us to build with any stage of company. With investing, we look at high-potential companies that are, say, 40% there with the problem they're trying to solve and that we believe we can get them to 100% using our team and assets.
We don't want to just build things that CareFirst benefits from. We take the approach of looking at both member needs and market needs and ask, where are the intersections? This helps identify opportunities that are sustainable and help make things happen through a series of changes. Neither payers nor private equity firms alone can achieve that.
Editor's note: This story was updated to correct Ricardo Johnson's title. Updated on March 10, 2022.
"All of us are doing our best to implement the most transformational Medi-Cal initiative in state history, and to put all this together without a public process is very disconcerting." -- Jarrod McNaughton, CEO, Inland Empire Health Plan.
Kaiser Permanente has a new direct contract to provide care for California's Medicaid (Medi-Cal) enrollees. The issue? It didn't have to bid for it. The exception has angered other Medi-Cal MCOs and raised questions about not only the integrated delivery network's (IDN) close ties to state government officials but also the potential impact on Medi-Cal's massive reform initiative, CalAIM.
1. What is KP's arrangement with the state?
As reported by Kaiser Health News (KHN)* and beginning in 2024, Kaiser will provide care for additional Medi-Cal enrollees but only those who are current IDN members. The exception is children in foster care and those who are dually eligible for Medicaid and Medicare. Kaiser will hold the only statewide Medi-Cal contract and will be the only MCO permitted to limit who it cares for. The company currently covers Medi-Cal enrollees but through subcontracts with half of the state's other program plans (12 of 24).
2. Why does it matter?
Three reasons: Process exceptions, competitor losses, and potential reform impacts.
KHN notes that Medi-Cal's other MCOs "have spent many months and considerable resources developing their bidding strategies" for 2024. To KHN, the CEO of Inland Empire Health Plan (IEHP) Jarrod McNaughton stated that "to put all this together without a public process is very disconcerting."
The bidding process exception results in notable enrollment and financial losses for plans that Kaiser has historically subcontracted with: 144,000 members and $10 million in associated annual revenue for IEHP and 244,000 members for L.A. Care Health Plan. Citing Michelle Baass, Department of Health Care Services director, Kaiser Medi-Cal enrollment will increase 25% as a result of the contract.
KHN further reports that all of Kaiser's Plan Partners keep "a small slice of the Medi-Cal dollars earmarked for those patients" and that "[u]nder the new contract, KP can take those patients away and keep all of the money." That small slice was 2% which Kaiser noted in its response statement "is no longer effectively capped."
There is added concern that the Kaiser deal will jeopardize CalAIM, the state's new five-year Med-Cal transformation that includes new non-clinical benefits (e.g., social determinants of health), Enhanced Care Management, and data/infrastructure support. One of CalAIM's primary objectives is to make Medi-Cal "integrate more seamlessly with other social services." This could be disrupted if care decisions are made not by local health plans working closely with their community-based, safety net providers but by Kaiser.
3. How are stakeholders responding?
In short, with frustration.
"It has caused a massive amount of frenzy," said Jarrod McNaughton, IEHP CEO. In a prepared document, IEHP adds: "Awarding a no-bid Medi-Cal contract to a statewide commercial plan with a track record of 'cherry picking' members and offering only limited behavioral health and community support benefits not only conflicts with the intent and goals of CalAIM but undermines publicly organized healthcare."
Criticism is coming from other sectors as well. KHN quotes California State University-East Bay health policy faculty Andrew Kelly, who notes: "[T]here's a different type of power that comes from your ability to have this privileged position within public programs."
Kaiser counters that "nothing in this state contract should affect the current reprocurement process" and that its contract actually "levels the playing field to include only network model plans in the procurement."
4. What is KP's position?
As noted by KHN, Kaiser's CHO Dr. Bechara Choucair argues that because the company has no special profit motive—citing as evidence its significant nonprofit and safety net commitments—the sole-source contract should not be an issue. In its written statement, the IDN also addressed that its:
service area will include new and multiple counties;
member-only contract will exempt it from the Medi-Cal auto-enrollment process;
member-only contract includes people with a variety of health statutes and that its model is recognized as innovative; and
Medi-Cal performance and reporting requirements will be identical to other MCOs.
5. What now?
The state legisature and CMS must approve Kaiser's sole-source contract. State approval includes an exception that would allow Kaiser to contract in Medi-Cal County-Operated Health System service areas. Other Medi-Cal MCOs are preparing media statements, but they were not final at the time of publication.
*Kaiser Health News is not connected to Kaiser Permanente
MA market dynamics are becoming increasingly frenetic as overall enrollment and plan growth sets records.
The numbers from Medicare Advantage (MA) 2022 open enrollment are in. They offer expected results and a few surprises—some of which have already dominated the headlines. One thing is for sure: MA market dynamics are becoming increasingly frenetic as overall enrollment and plan growth sets records.
Three plans were the top performers compared to overall growth
Based on a comparison of CMS Monthly Enrollment by Plan data (January 2021 and January 2022), three large commercial carriers had the most year-over-year (YOY) growth. Centene; Aetna, a CVS Health company; and UnitedHealth Group grew 29%, 12%, and 11%, respectively—all of which eclipsed YOY overall MA market growth of 8.8%.
Highlights from the leading carriers include Centene's MA entry into three new states, with all three insurers—including UnitedHealth—grabbing enrollment from other plans (largely Humana and Cigna).
A tale of the next three plans
While Anthem and Humana failed to meet their projections, they grew enrollment nonetheless—by 24% and 7%, respectively. Cigna was the only large commercial payer to lose overall enrollment, a disappointment given the company's goal of 10%–15% recurring annual MA growth.
These MA competitors cited different and sometimes disputed factors. "It's been a competitive market. It remains a competitive market," said Anthem CEO Gail Boudreaux. Business Insider reports that Humana and Cigna "blamed heightened competition for older health-insurance customers. In Humana's case, multiple analysts believe the company priced too conservatively. Humana also cited aggressive competitor sales and marketing tactics while stating the company would be reexamining its value proposition.
A record-breaking number of plans in more counties and states
Plan growth tracked with enrollment growth, with a new high of 3,834 MA plans available in 2022 (an 8% increase from 2021).
Geography wasn't the only growth factor
Having a retail footprint was a driver that worked for Aetna, whose acquisition by CVS Health offers unique advantages for MA growth: retail chains with health clinics and pharmacies that offer an alternative site not only for lower-cost primary care but also customer-broker meetings. A reimagining of the sales process, including agent house calls, has been a significant challenge for all health plans during the pandemic.
New MA players identify other reasons, while denying their pricing helped them steal membership from incumbents. Alignment Healthcare, Bright Health, Clover Health, and Devoted Health were the top four MA startups this enrollment season.
The disrupters disrupted on cue, mostly
Devoted and Clover—like Aetna, Centene, and United—grew membership faster than the market and are part of the "flood of competition" traditional plans are facing. Alignment Healthcare also grew its MA membership, 16% according to Business Insider and with 90% of that number gained from established carriers. It is still an area to watch, however. Even with this number, Alignment did not meet its growth projections and there is talk that the MA startup market may be facing a bubble as stock prices for startups-gone-public like Alignment, Cano Health, Clover Health, and Oscar Health have dropped significantly since their IPOs.
Editor's note: This story was updated on February 16, 2022.
The biennial report on Mental Health Parity and Addiction Equity Act (MHPAEA) shows that health plans are not yet up to speed with new parity requirements.
The results are in, and they don't look good. On January 25, the biennial report on Mental Health Parity and Addiction Equity Act (MHPAEA) showed that health plans are not yet up to speed with new parity requirements. The focus was on the reporting of non-quantitative treatment limitations (NQTL), or plan-imposed limits that go beyond cost-sharing and allowable visits (quantitative). Providers and payers alike are reacting to the report, which includes multiple recommendations for parity compliance and enforcement.
Five key findings
The MHPAEA report was the first since health plans were required to "provide comparative analysis" of their NQTLs, which include "limitations or exclusions based on medical necessity, facility type, prior authorization, or standards for admission to a provider network" among others. The report—issued by the three federal agencies that have MHPAEA oversight (the Departments of Labor, Treasury, and Health and Human Services; "the Departments")—included the following key findings and recommendations:
A focus on NQTL enforcement. NQTLs are required by Consolidated Appropriations Act (CAA) as of February 2021. The report found that "[n]one of the [NQTL] comparative analyses EBSA or CMS have initially reviewed to date contained sufficient information upon initial receipt." (EBSA, the Employee Benefits Security Administration, and CMS are charged with MHPAEA enforcement.)
Lack of compliance ranged from inadequate details, accuracy, evidence, analysis quality, and scope to a complete lack of response.
Corrective actions and plan response. EBSA and CMS have notified plans of non-compliance, noting that "26 plans and issuers so far have agreed to make prospective changes to their plans."
Recommended penalties. The report recommends civil financial damages for non-compliance: "EBSA believes that authority for DOL to assess civil monetary penalties for parity violations has the potential to greatly strengthen the protections of MHPAEA."
Concrete definitions. Noting that the "MHPAEA affords plans and issuers great latitude in defining what constitutes a MH/SUD benefit, and therefore what is subject to parity," the report recommends "that Congress consider amending MHPAEA to ensure that MH/SUD benefits are defined in an objective and uniform manner pursuant to external benchmarks that are based in nationally recognized standards."
Making more resources available. The report was not without positives, including the extensive stakeholder engagement that has led to consumer assistance, state partnership efforts, and additional payer guidance including an updated MHPAEA Self-Compliance Tool and FAQs.
These results were in addition to a spotlight on findings related to existing parity requirements. They included health plan coverage exclusions for: 1) applied behavior analysis for autism spectrum disorder; 2) medication-assisted treatment for opioid addition; 3) drug testing for SUD; and 4) nutritional counseling for eating disorders.
Noting the relationship between stigma and parity, the report adds that "once individuals attempt to seek care, they often find that treatment for their mental health condition or substance use disorder operates in a separate, and often very disparate, system than treatment for medical and surgical care, even under the same health coverage."
MHPAEA generally applies to employer group health plans (including Medicare Advantage), managed care Medicaid, CHIP programs, and—through an Affordable Care Act amendment—individual marketplace plans.
Provider response
The elephant in the room is the nearly 15 years that have passed since the MHPAEA first required MH/SUD coverage parity. Given this, stakeholder response to this year's report varies widely beyond general and continued parity support.
The American Medical Association (AMA) stated the following in its response letter to Congress: "This report underscores two simple facts: insurers will not change their behaviors without increased enforcement and accountability, and patients will continue to suffer until that happens." The AMA added that "insurers do not care or do not know how to comply with the 2008 law." The organization echoed EBSA's call for financial penalties and continued MHPAEA enforcements.
The AMA also urged Congress to pass the Parity Implementation Assistance (PIA) Act. PIA would award state grants to support parity—noting that "[s]tates receiving the grants must request and review from private health insurance plans their required comparative analysis of NQTLs with respect to MH/SUD."
Payer response
For a payer response, HealthLeaders contacted AHIP, an industry association representing health insurance providers. AHIP SVP of communications Kristine Grow responded in part: "Since the passage of MHPAEA, health insurance providers have introduced many innovations and improvements to expand access to mental health services."
This is true.
A 2018 Yale School of Public Health study found "that the MHPAEA resulted in important changes to health plan coverage of MH/SUD treatments, including the elimination of differential annual limits, differences in many cost-sharing arrangements, and elimination of many treatment limits imposed on MH/SUD treatments." The report specifically noted that "differential financial requirements [for MH/SUD] were close to eliminated: and that some decline in out-of-pocket payments was paired with "modest increases in use and spending per enrollee."
The study results were not generally positive, however, and noted the importance of NQTL compliance. Returning to 2022 findings, the MHPAEA report stated that "many plans and issuers stated that they were unprepared to respond to the Departments’ [NQTL] requests and had not started preparing their comparative analyses."
AHIP's Grow agrees, noting that NQTL "is a new process for everyone" and that there were "just over 3 months from the time the [NQTL] certification process became law to requests being sent to health insurance providers." She adds: "It’s clear that more robust tools and templates that include examples of complex benefit analyses would be useful."
Added constraints
There is no doubt that the latest results fall short of MHPAEA requirements, and it is difficult to understand why after so many years. It is also important to understand additional barriers to parity. In a forum preceding the 2022 report release, Department of Labor Secretary Marty Walsh stressed that "when someone calls for treatment, that is the moment they need to receive it" and that "as a person in recovery, I know firsthand how important access to mental health and substance-use disorder treatment is."
But access doesn’t happen without MH/SUD providers and the shortage of them is well documented. This shortage results in either near-zero access, especially in rural areas, to appointments that cannot be scheduled for months.
In addition, parity applies to payers. But an increasing number of MH providers, particularly psychiatrists, no longer accept insurance and require patients to private pay. A 2015 JAMA Psychiatry study found that far fewer psychiatrists accepted insurance compared to other specialists: nearly 30% lower for private insurance, Medicare, and Medicaid.
What will turn the tide?
If the pandemic isn't enough reason to focus on better mental health parity, what is? COVID-19 has put MH/SUD front and center, particularly equity for people of color. Payers are focused on this issue alongside another: including behavioral health in value-based total cost of care.
Perhaps the combination of these factors—along with compliance support and penalties—will be the tipping point.