Payers and providers shouldn't underestimate the value of streamlined, accurate data, especially when it comes to contract negotiations.
HealthLeaders sat down with Britt Barrett, managing director and teaching professor at Brigham Young University and former CEO with HCA, Texas Health Resources, and SHARP, to discuss what needs to be done in order for data to be leveraged for both payers and providers in contract negotiations.
Healthcare has a big target on its back when it comes to ransomware attacks.
Ransomware attacks affect dozens of different sectors, but healthcare seems to be a particular favorite. An analysis published by EmsiSoft looked at just how big the ransomware problem is for hospitals and health systems.
Firstly, ransomware attacks are difficult to gather data on because many of them aren’t recognized as ransomware attacks. “Encryption events” is a term often used which can make tracking these events a challenge, reported cybersecurity firm Emsisoft.
In 2023 over 2,000 hospitals, schools and governments were directly impacted by ransomware attacks. The Change Healthcare attack is just the latest in the mix, and now they may even be facing another one.
At least 141 hospitals were affected by ransomware attacks last year, and cost U.S. healthcare organizations about $77 billion in downtime alone since 2016.
So far, despite government task forces, asset seizures and arrests have been implemented, but ransomware attacks persist. One solution may even be to outright ban the payment of ransoms, according to Emsisoft, stating in a blog post: “If it is made unprofitable, most attacks will quickly stop.”
The massive issue is only set to worsen unless health tech experts can find viable solutions to protect health systems from these attacks. Check out this infographic for a breakdown of where healthcare falls in ransomware attacks.
Medicare Advantage has gone through numerous changes and hurdles since its creation.
The recent rate cut to Medicare Advantage is the biggest change we’ve seen to the program since 1997. Created over thirty years ago, Medicare Advantage has gone through much evolution, ups and downs of popularity, and regulation pressures since it began. With the original intention of giving consumers a Medicare option beyond the traditional fee-for-service program, and bringing the financial savings and efficiencies in managed care in the private sector, MA has become a public favorite in recent years with higher utilization.
MA has generally been more expensive than Traditional Medicare, and those overpayments have increased in recent years. In 2019 MA spending was up an estimated $7 billion compared to Traditional Medicare.
The recent rate cut to MA signals a significant shift in the program that has been a public favorite in recent years. For the payer, this change could impact business by potentially reducing overpayments and increasing competition within the MA market.
It is important for payer c-suite leaders to closely monitor these developments and adjust strategies accordingly to remain competitive in the evolving landscape.
Take a look at how MA has changed over time since its creation.
Medicare Advantage Timeline
1982: Tax Equity and Fiscal Responsibility Act (TEFRA) authorizes Medicare to contract with risk-based private health plans.
1985: Rules to implement risk-based contracting are completed and Medicare Part C begins.
1997: Balanced Budget Act: program renamed to Medicare + Choice: Medicare payments are reformed by extending per-case payment methods to all categories of post-acute care.
2000: Benefits Improvement and Protection Act (BIPA) restores approximately $11.5 billion over five years to hospitals under Medicare, Medicaid, and other federal and state health care programs, but fails to reverse the declining participation of Medicare plans and the enrollment of beneficiaries.
2003: Medicare Modernization Act: Name changed to Medicare Advantage.
2010: Reductions in MA payments are made by Patient Protection and Affordable Care Act.
The new rate cut will have a strong impact, but not on big payers.
Just about every insurer is up in arms over the new Medicare Advantage rate cuts.
To recap: MA plans will see a base rate cut of 0.16% in 2025 since risk scores are expected to be 3.86%. The expected average change in revenue will be 3.7%, and CMS notes that “this is an increase of over $16 billion in 2025 compared to 2024 in expected MA payments.”
However, this rate cut isn’t going to be a huge blow to big payers. Yes, we saw their stocks take a dive when it was announced, but it won’t be detrimental to their business.
MA insurers started the 2023 year financially stable, even considering the uptick in utilization late in the year. The giants still showed strong profits in the billions: Humana at $2.5 billion, Cigna at $5.2 billion, UnitedHealth at $22.4 billion, Elevance at $6 billion, Centene at $2.7 billion, CVS (Aetna) at $8.3 billion…you get the picture.
The rate cut is still a big deal. It's the biggest change in Medicare since Medicare Choice was included in the Balanced Budget Act of 1997, which reformed Medicare payments by extending per-case payment methods to all categories of post-acute care.
Pressure for small insurers
It will be a bigger deal for smaller insurers. Industry expert Paul Keckley dives into who will be most affected by this MA change in his Keckley Report. A few groups he says will feel the brunt of the change are:
Smaller Medicare Advantage sponsors and their lobbying groups will take a hit after trying their best to defeat this rule and members will pay dues for the results.
Hospitals and physicians will feel the effect of this rule in the form of reimbursement cuts to care providers, especially smaller and rural health systems with large MA enrollment.
MA brokers, agents and marketing companies may feel a hit to their profits from constraints of MA marketing tactics and member transparency protections. These could reduce revenue for third-party marketing organizations that sell their services to these plans. Keckley says that a shakeout is likely.
MA enrollees may see fewer plan options and higher premiums, thickening the barrier to access affordable healthcare. Although the ruling adds benefits for behavioral health and data privacy protections, it most likely won’t outweigh the stiffening premiums and fewer plan options. Keckley says that while big MA plans will be hurt but will adapt, while small plans will be left in the dust.
Supplemental service providers will see lower payments from CMS and may be forced to reduce or eliminate supplemental benefits that aren’t as important to members. Keckley surmises that benefits like fitness programs may be cut, but dental and prescription drug benefits appear to be safe.
Lastly, the 2024 Presidential campaign is happening right alongside this MA change and Keckley says that he has no doubt the campaigns “will opine to Medicare security in their closing rhetoric recognizing MA covers more than half its enrollees.” MA insurers will submit their new plans to CMS by June 3 and open enrollment begins in October, a month before the nation votes for the next president.
Overall, this MA rule will affect all plans in one way or another, whether it’s day to day operations, heightening friction with providers or reimbursement negotiations, Keckley concludes in his report that MA is simply a work in progress.
CMS announced it will continue with its 0.16% rate cut for Medicare Advantage plans insurers.
The Medicare Advantage rate cut proposed in January is here to stay, and payers are not happy.
CMS announced the finalization of the 0.16% rate decrease on Monday, to the disappointment of payers and their investors.
Insurer stocks immediately began to drop, with Humana seeing a nearly 10% drop, CVS Health dropping 5.9%, UnitedHealth decreasing by 4.5%, and Elevance dropping 4%. The stock performance plays into the growing concern amongst investors that Medicare Advantage will continuously face more regulatory and earnings pressure in the future.
With the new rate, next year Medicare Advantage payment cuts could drop by 1% per month per beneficiary, according to a study from the payer lobbying group Better Medicine Alliance, which represents payers in Medicare.
What does it all mean?
Medicare Advantage has seen an unusual rise in medical costs recently, with higher utilization to blame, and insurers are arguing the CMS did not factor in these rising costs that plans are facing when it calculated the new rate. Some payers are arguing that the new rate will hurt seniors, who have been responsible for the higher utilization rates that Medicare Advantage has been seeing.
Medicare Advantage has been a hot topic as of late, with several factors shaking up the market and feelings of uncertainty about how the market will perform in 2024 and 2025. The Biden Administration’s crackdown on upcoding practices is one factor that slowed the original excitement and popularity around Medicare Advantage.
Just last week HealthLeaders reported on the strength of the Medicare Advantage market, with a Chartis study revealing strong potential and stability as enrollment grows. The growth comes on the heels of a big Medicare Advantage milestone: over 50% of Medicare-eligible persons enrolling in a Medicare Advantage plan. With these factors, the optimism of insurance executives prevails.
Other influential factors include an aging population that will most likely continue the high utilization rates. Procedures like knee and hip replacements for seniors are two of the main operation utilizations that are seeing an uptick. Tougher star ratings have also played into the Medicare Advantage payer landscape, with many seeing a decrease in their ratings. Broker constraints and opportunities in special needs plans may also have some effect on payers in the MA space.
Payers may be in a rush to exit the Medicare Advantage market as they see its profitability declining, but this may not take place immediately. Medicare Advantage is still a massive part of the health insurance market that stands to continue profitability if payers can pivot their strategies, get creative with existing opportunities, and play with a straightforward hand.
The 2024-2030 plan lays out strategic goals and principles to help the health IT sector.
Last week the ONC released a strategic plan that outlines health IT priorities with a focus on health equity and AI use over the next five years. The plan intends to serve as a guide for federal health IT initiatives, as well as an impetus for activity in the private sector.
According to the ONC and HHS, the plan, which is a collaboration of the ONC with 25 other federal agencies, outlines federal health IT goals to improve health experiences and outcomes for individuals and populations as a whole.
The plan cites that its intended use aims to: prioritize resources, align and coordinate efforts, benchmark and assess progress, and signal priorities to the industry.
The plan outlines four main goals:
1. Health and wellness: Promote health and wellness for individuals, communities and populations so they feel empowered to manage their health.
2. Enhance the delivery and experience of care: Enhance the delivery of care for everyone from patients to providers to public health experts.
3. Accelerate research and innovation: Accelerate research and innovation through collaborative efforts across health IT developers and users.
4. Connect the health system with health data: Connect the health system with health data for all health IT users
Goals 1-3 are focused on plans to improve the experiences and outcomes for health IT users, while goal four focused on the policies and technologies needed to support those users.
The plan also outlines six principles including:
Person-centered, inclusive design to “strengthen individuals’ ability to securely access and use their own health information to take greater control over their own health, while ensuring that their data are accurate.”
Safety and quality to “promote the use of health data that are accurate and provide benefits to individuals and their communities.”
Privacy and security to “provide tools, guidance, and regulations to build trust and protect individuals’ health information from misuse.”
Data-led decision making to support health information sharing throughout the healthcare industry in order for groups, organizations and individuals make informed decisions and create better health outcomes.
Increase health equity across all populations to “advance the use of data to represent social needs and the conditions in which people live, learn, work, and play.”
Encourage innovation and competition to support “new solutions and business models for better care and improved outcomes.”
"The draft plan acknowledges the swift evolution of AI and increased use in health care, emphasizing the urgent need for the federal government to navigate this transformative landscape both responsibly and effectively in health and health care," ONC officials wrote in a blog post.
The affordability of health coverage is often a barrier for many.
The number of uninsured individuals in the US has slowly dropped over the last few years. Initiatives like the Affordable Care Act and enhanced subsidies in the Marketplace have helped millions obtain affordable coverage.
By the end of the first quarter of 2023 the national uninsured rate dropped 7.7 percent. Between 2020 and 2023 the total number of uninsured Americans declined from 31.6 million to 25.3 million.
The group with the highest enrollment rate were individuals whose income was either below 100 percent or between 200 and 400 percent of the federal poverty level. Racial and ethnic disparities in health coverage also persist, despite enrollment gains over time.
According to KFF, the cost of insurance is the number one reason for individuals not purchasing coverage is affordability. In 2022, 64 percent of nonelderly uninsured adults cited the high cost of coverage as their main reason for not purchasing insurance.
Many also cannot access coverage through their jobs, in states that did not expand Medicaid, many lower-income adults still remain ineligible for financial assistance for coverage. Up until recently, undocumented immigrants were eligible for federally funded health insurance, but some states like California, Oregon and Washington have taken aim at this issue and have offered extended coverage to immigrants.
The Biden administration has made healthcare a major focus of its term, and that has certainly played a role in increased enrollment. The significant enrollment gains in 2021-2023 can be associated with the administration’s policies to support health insurance expansion.
Individuals who do not have health coverage often forgo or delay seeking needed care and this only exacerbates the healthcare needs of the nation, leading to more hospitalizations and care team burnout. Numerous studies repeatedly show that uninsured individuals are less likely than the insured to seek or receive preventative care and other services for major health concerns and chronic diseases like diabetes and heart conditions.
Not being able to secure health coverage can have massive financial implications. When individuals without insurance do seek care, they're often faced with expensive bills that they cannot afford. Since most of the insured population is a lower-income group, seeking care can quickly turn into medical debt affecting other financial aspects of the individual's life and possibly deter them from seeking follow-up care.
Scams are on the rise and health insurance is no exception.
Picture this: you have a medical emergency, you head to a hospital, only to discover that your health insurance that you pay hundreds for each month doesn’t even exist.
The FTC is now sending out nearly $100 million in refunds to consumers that purchased fake health plans from Benefytt Technologies. The company and its third-party partners marketed and operated deceptive plans that targeted consumers searching for a comprehensive plan under the Affordable Care Act (ACA).
A 2022 FTC complaint details how Benefytt sales agents made telemarketing calls pitching their sham health plans that were not ACA-qualified. When consumers navigated the company’s websites, they were often led to a sales agent who would pitch them Benefytt’s unqualified, fake plans. Consumers were led to believe they were purchasing comprehensive plans for hundreds of dollars each month that in reality, left them with no protection in a medical emergency.
The Tampa-based company has been ordered to pay $100 million in refunds to consumers which included illegally charged junk fees for unwanted add-on products without their permission. In the settlement, Benefytt was also prohibited from lying about its products and charging these immense junk fees.
According to the FTC’s complaint, Benefytt’s deceptive sales process violated the FTC Act, the Telemarketing Sales Rule and the Restore Online Shoppers Confidence Act. All of these harmed consumers in numerous ways, such as: lying about the nature of the plans, bundling and charging junk fees for unwanted products without consent, and making it hard to cancel.
In separate court orders, Benefytt’s former CEO Gavin Southwell and former vice president of sales Amy Brady were permanently banned from selling or marketing any healthcare-related product. The former VP was also banned from telemarketing. Southwell acted as Benefytt’s president and CEO from 2016 to 2021 and Brady served as vice president of sales for more than a decade, before also leaving in 2021.
The complaint also alleges that Benefytt, Southwell, and Brady all were aware of their agent’s misconduct, but rather than stopping it, continued to profit from it and took steps to further conceal the deception. One example the complaint offered details how Benefytt assisted and facilitated the fraudulent offerings of one of their largest distributors, Simple Health Plans. Benefytt allegedly knew of the prevalent compliance issues with Simple Health’s sales practices, and failed to terminate the distributor until FTC sued Simple Health in October 2018.
Benefytt and two of its subsidiaries have agreed to a proposed court order that will require them to: pay $100 million for consumer redress, inform current customers and allow them to cancel, sell all products without misleading consumers, and closely monitor other companies who sell their products.
From an FTC press release: “Benefytt pocketed millions selling sham insurance to seniors and other consumers looking for health coverage,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “The company is being ordered to pay $100 million, and we’re holding its executives accountable for this fraud.”
Scams such as these are obviously dangerous and take advantage of consumers looking for comprehensive coverage. Payers should be aware of these events and do their best to educate their consumers of the dangers of online health insurance scams, as well as how to spot and avoid them.
The FTC offers a resource on their website to help consumers spot and avoid health insurance scams.
These two new smartphone apps may have a big impact on pediatric care.
New tech, including AI, has sailed its way from the conception phase, to implementation. So far this year two new smartphone apps are paving the way for small scale solutions that can have a big impact.
The first comes from the University of Pittsburgh where clinicians have developed an AI algorithm that can identify acute otitis media (AOM), one of the most common childhood infections.
Roughly 70% of children develop an ear infection before their first birthday. These infections are difficult to spot and distinguish from other types of infections that do not require antibiotics. But with this new smartphone AI tool, clinicians can more easily analyze a patient’s eardrum through an otoscope connected to a camera. The tool proved to have a 93% success rate at identifying AOM, versus expert physicians success rate at around 30% - 48%.
With implementation of this new tool, clinicians will no longer have to struggle to look in the ear of a wiggly infant to determine if they have an ear infection.
The second is an app developed by Intermountain Health that would help detect jaundice in newborns. Approximately three out of every five babies in the US develop jaundice within days after birth, which could lead to serious health concerns if not treated.
Intermountain Health partnered with a Norwegian digital health company called Picterus AS to create the app that uses a smartphone camera and a laminated card to measure bilirubin levels in newborns, allowing for a diagnosis without returning to the hospital for a blood test.
This new tech would allow parents to test their babies at home and alert care teams if jaundice is detected.
These two new smartphone apps may have a big impact on pediatric care.
New tech, including AI, has sailed its way from the conception phase, to implementation. So far this year two new smartphone apps are paving the way for small scale solutions that can have a big impact.
The first comes from the University of Pittsburgh where clinicians have developed an AI algorithm that can identify acute otitis media (AOM), one of the most common childhood infections.
Roughly 70% of children develop an ear infection before their first birthday. These infections are difficult to spot and distinguish from other types of infections that do not require antibiotics. But with this new smartphone AI tool, clinicians can more easily analyze a patient’s eardrum through an otoscope connected to a camera. The tool proved to have a 93% success rate at identifying AOM, versus expert physicians success rate at around 30% - 48%.
With implementation of this new tool, clinicians will no longer have to struggle to look in the ear of a wiggly infant to determine if they have an ear infection.
The second is an app developed by Intermountain Health that would help detect jaundice in newborns. Approximately three out of every five babies in the US develop jaundice within days after birth, which could lead to serious health concerns if not treated.
Intermountain Health partnered with a Norwegian digital health company called Picterus AS to create the app that uses a smartphone camera and a laminated card to measure bilirubin levels in newborns, allowing for a diagnosis without returning to the hospital for a blood test.
This new tech would allow parents to test their babies at home and alert care teams if jaundice is detected.