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May 8, 2007

NY Insurance Department Posts External Appeals Report

The New York Insurance Department today posted its Annual Report on the External Appeals Program covering the reporting year 2005. The following is excerpted from the report:

  • A brief overview of the report reveals that the number of external appeal requests
    submitted to the Insurance Department continues to steadily increase. In 2005, the
    number of external appeals increased 7% from 2004, and notably in 2004 the number of
    external appeals increased 29% from the previous year. In 2005, the Insurance
    Department received 2,475 external appeal requests, the highest number of requests
    since the Program’s inception.

  • In addition, the 2005 External Appeal Program results also show a slight increase in the
    percentage of medical necessity denials overturned in whole or in part by external appeal
    agents, while the experimental or investigational denials overturned in whole or in part by
    the agents decreased significantly.

I'm always immediately skeptical of discussions that focus on percentages. In my experience, percentages are used most often when nominal numbers would be far less "notable." With overall numbers in the low thousands, getting large percentage fluctuations isn't that difficult. As an example, consider that while the 2003-05 increase in submitted external appeal requests was 36%, the increase in rejected external appeal requests during the same period was 47%. The nominal difference in rejected requests, however, was only 216. Considering the millions upon millions of claims processed in New York every year, none of these numbers are anything I can get too excited about.

July 17, 2007

Attorney General Opposes Provider Quality/Cost Rankings

Saturday's New York Times reports on an effort by the Attorney General's office to shut down UnitedHealthcare's imminent pricing and quality rankings:

In a sharply worded letter, the New York State attorney general's office asked a health insurance company yesterday to halt its planned introduction of a method for ranking doctors by quality of care and cost of service, warning of legal action if it did not comply.

The letter was addressed to Thomas J. McGuire, a senior lawyer in Hartford for UnitedHealthcare, a unit of UnitedHealth Group in Minneapolis.

It asked the company to cancel its plan to release the rankings in September, citing a furor over a similar program's introduction in Missouri in 2005. There, physician groups, including the American Medical Association, said the cost rankings primarily reflected the cost of care to the insurer --- not to patients.

Assuming that AMA's assertion is true, I'm not sure why that invalidates the rankings. Costs of care are paid out of premium dollars which are ultimately paid by patients and employers, so while the patient's interest in seeing cost is indirect, it's still rather salient.

Linda A. Lacewell, a senior lawyer in the office of Attorney General Andrew M. Cuomo, wrote in the letter that the ranking would apparently be used to steer consumers toward selected doctors. "To compound the situation," she wrote, "we understand that employers may act on these 'ratings' to offer financial inducements such as lower co-payments or deductibles to promote 'cost-effective' doctors to their employees."

Ms. Lacewell said patients might be steered toward doctors based on flawed data and UnitedHealthcare's "profit motive." She wrote, "Consumers may be encouraged to choose doctors because they are cheap rather than because they are good."

Flawed data is obviously worrisome, but if the data is valid one wonders at length why consumers shouldn't be able to choose cheap over good if that's what they want.

Read the full article here.

August 17, 2007

More AG Grousing About Provider Cost/Quality Rankings

Here's a second shot across the bow from the Attorney General's Office:

Attorney General Andrew M. Cuomo today warned two major health insurers, Aetna and Cigna Healthcare, that their physician ranking programs, as currently designed, are likely to confuse or even deceive consumers. In letters to the two insurers, Attorney General Cuomo expressed concern about the design of the programs and requested a full justification for them.

The excerpt is from the AG's press release, which is available on the AG's website here. There's a small blurb in the New York Times and a pretty decent writeup at Newsday.

Also available are PDF versions of the letters themselves: Aetnas', and CIGNA's.

The previous letter to United is here and was covered on Supraspinatus in an earlier post.

September 7, 2007

United HealthCare Settles Claims Processing Problems for $20 Million

On the Insurance Department's website:

United HealthCare will pay New York $4 million to settle claims processing problems, the largest ever health related settlement entered into by the State Insurance Department, Superintendent Eric Dinallo announced today. This is part of a landmark settlement agreement between the health insurer and 37 states that includes a potential for payments of $20 million and a three-year process improvement plan for United. More than $13 million will be distributed immediately to the participating states.

The settlement follows nationwide complaints and coordinated investigations by numerous state insurance regulators of United HealthCare's claims practices involving coordination of benefits, appeals and grievances, explanations of benefits, utilization review and other areas.

The full press release is here.

September 24, 2007

DOH Study: Managed Care Quality Improves

From the DOH website:

More people enrolled in managed care plans in New York are receiving the preventive and chronic-disease services that are essential to good health, according to a new study from the State Department of Health.

The 13th annual managed care performance report compiles 2006 performance information collected from more than 30 health plans certified by the Department to serve commercially and publicly insured (Medicaid, Child Health Plus and Family Health Plus) managed care members. Performance is measured across preventive health, chronic disease and member satisfaction measures.

The electronic version of the report, known as eQARR, is available here. Read the full DOH press release here.

October 19, 2007

AG Puts the Brakes On More Physician Ranking Programs

According to an AG press release issued yesterday:

In an expanding industry-wide investigation, New York Attorney General Andrew M. Cuomo today [10/18/2007] issued letters to Empire Blue Cross Blue Shield, Preferred Care, and HIP Health Plan of New York/GHI requesting information on the insurers' doctor ranking programs.

More below the fold.

Continue reading "AG Puts the Brakes On More Physician Ranking Programs" »

October 22, 2007

Insurance Department Posts Annual HMO Consumer Guide

The Insurance Department has posted the 2007 edition of the "Consumer Guide to HMOs." It is available here.

October 30, 2007

AG Okays Cigna's Physician Rankings

According to the New York Times online:

Cigna Corporation has agreed to improve its rankings of physicians in response to an investigation of health insurers suspected of directing patients to cheaper doctors, according to the office of Attorney General Andrew M. Cuomo.

Read the full article here. The Attorney General's press release is here, and the Cigna settlement agreement itself is here.

November 19, 2007

Minnesota Medical Association Turns the Tables, Ranks Insurers' P4P Programs

Turnabout is fair play, at least idiomatically speaking:

In their most confrontational move yet, the [Minnesota Medical A]ssociation turned the tables on insurers by ranking nine of the so-called pay-for-performance programs. The Centers for Medicare and Medicaid Services ranked at the top while Bridges to Excellence, a program used by large, self-insured employers, was at the bottom.

Link to the full article here. One wonders if the Minnesota Attorney General will launch an investigation into the process behind the MMA's rankings?

December 3, 2007

Insurance Department Asks for Delay in UnitedHealthcare Policy Rollout

From the Insurance Department's website:

The New York State Insurance Department announced today that it has requested UnitedHealthcare to delay implementation of its new policy to require hospitals to provide notice within 24 hours after a patient has been admitted. The Department has requested the delay to ensure that the policy complies with Insurance Law and that the policy will not have an adverse impact on consumers or the delivery of health care services.

United's policy will impose a penalty of up to 50% of normal payment if the hospital fails to notify United within 24 hours after a patient is admitted. There are no exceptions to this policy, even for weekends or holidays when the hospital's business office may not be fully staffed.

The full press release is here.

December 8, 2007

Hearing to Reconsider SCHIP Disapproval

CMS issued a notice last week that it will hold an administrative hearing on January 6, 2008 to reconsider its decision to disapprove New York's State Children's Health Insurance Program, State Child Health Plan Amendment #10. The hearing will be held at the CMS New York Regional Office, 38-110A, 26 Federal Plaza, in New York City. This amendment would have increased the financial eligibility standard for SCHIP from the current effective family income eligibility level at or below 250% of the federal poverty level to an effective family income eligibility level at or below 400% of the FPL. CMS disapproved the amendment on the basis that it did not meet the requirements of sections 2101(a), 2102(a) and 2102(b)(3)(C) of the SSA. These requirements provide that SCHIP funds must be used to provide coverage to uninsured, low-income children in an effective and efficient manner that is coordinated with other sources of health benefits coverage, that the State plan include effective outreach procedures to enroll all eligible uninsured children, and that the coverage does not merely substitute for private coverage. To participate in the hearing as a party, you must petition the presiding officer by December 21. To participate as amicus curiae, you must petition the presiding officer before the hearing begins.

January 1, 2008

Insurance Department Sets Public Hearings for GHI Conversion

Today's Times Union has this story:

The public will have its say at the end of the month on a proposal for New York City health plan giant Group Health Inc. to turn into a for-profit entity. GHI merged in 2006 with another large insurer, HIP Health Plan of New York City, to form a plan that now has about 4 million members. As part of its conversion from a nonprofit to for-profit corporation, GHI-HIP proposes an initial public offering of stock.

The conversion must be approved by the state insurance commissioner.

The complete TU story (time limited) is here. The Insurance Department has posted all of the GHI conversion materials, including its plan of conversion, on its website here.

January 21, 2008

Spitzer Commits to Expand Child Health Plus

Governor Spitzer's Executive Budget will include $37 million to extend health insurance to an additional 70,000 children of working parents. New York sought approval last year to increase income eligibility levels for the State Child Health Plus (SCHIP) program from 250% to 400% of the federal poverty level. This equates to a family income of $82,000 for a family with two children. The Bush Administration increased the overall SCHIP budget, but would not permit states to expand the eligibility criteria. Governor Spitzer proposes to have New York fund the federal government's share of the expansion, which would have been $19 million. His goal is to provide health insurance coverage to all of the state's approximately 400,000 children who are insured; about 330,00 of whom now qualify for SCHIP.

January 29, 2008

Wellness Program Problems - the HR Perspective

Human Resources Executive Online takes a look at the problematic December EBSA guidance on wellness programs.

In early December, The Department of Labor's Employee Benefits Security Administration issued new regulatory guidelines that, according to legal experts, "close the door" on emerging cost-saving strategies employers might have considered using to entice workers to change their healthcare-related behavior patterns.

Specifically, EBSA's guidelines apply to "supplemental coverage" that was primarily created for, among other things, reducing deductibles in standard healthcare insurance. Carriers have created products that use supplemental insurance as a basis for employee health and wellness programs, but with the new guidelines, employers must step much more carefully when choosing that strategy.

"The guidance letter effectively plugs a loophole that could have allowed programs to discriminate against people with health problems that are beyond their control," says Tom Bixby, a partner in the Health Law practice group at Neal Gerber Eisenberg, a Chicago law firm.

Read the full article here.

Universal Healthcare Advocacy Group Cautions Against GHI/HIP Conversion

Today's Times Union ran an editorial by Richard Propp, M.D., chair of the Capital District Alliance For Universal Healthcare Inc. raising questions regarding the GHI/HIP conversion.

The huge combined health insurance company GHI/HIP wants to convert from nonprofit to for-profit status. Shocked? I doubt it. Empire Blue Cross-Blue Shield set the example in 2002. . . .

The Capital District Alliance for Universal Healthcare believes that health care is a necessity and a social good, and that everyone should have access to high-quality, appropriate and necessary health care. The GHI/HIP "for profit" quest does not appear to further that goal.

Dr. Propp points out that in four other states, proposed not-for-profit to for-profit conversions have been turned down after scrutiny by regulators, and he raises a number of questions about the conversion and the way the conversion is being handled by the Insurance Department, including the following:

  • What are the consequences of the company going from an ethic of subscriber value to one of shareholder value?
  • Will the need to assure adequate profits mean premiums will increase and that more care will be denied or delayed?
  • 2.7 million people lack health insurance in New York. What effect will conversion have on that number?
  • How much of the new revenues generated by going for-profit will finance GHI/HIP lobbyists, and will they work for consumers or shareholders?
  • Are there no other management alternatives to for-profit? Are relevant studies being carried out by this administration?
  • GHI/HIP has $900 million in reserves and just bought Connecticare for $350 million. Why does GHI/HIP need for-profit status to secure its future?

Read the full article (time limited) here.

February 1, 2008

GHI/HIP Makes Case for Conversion

Today's TimesUnion details yesterday's hearing on the proposed GHI/HIP conversion to for-profit status.

Before a table of state officials and dozens of dubious New Yorkers worried about their health insurance, officials from EmblemHealth -- owner of Group Health Inc. -- pleaded their case Thursday to take the company public.

Read the full article (time limited) here.

If the conversion interests you, check out the webcasts of the hearing (and other prior hearings) archived here at the Insurance Department's website.

February 13, 2008

Cuomo to Sue UnitedHealth and Ingenix For "Manipulating Reimbursement Rates," Calls Ingenix a "Conduit For Rigged Data"

From the AG's website:

Attorney General Andrew M. Cuomo today announced that he is conducting an industry-wide investigation into a scheme by health insurers to defraud consumers by manipulating reimbursement rates. At the center of the scheme is Ingenix, Inc., the nation’s largest provider of healthcare billing information, which serves as a conduit for rigged data to the largest insurers in the country.

Cuomo also announced that he has issued 16 subpoenas to the nation’s largest health insurance companies including Aetna (NYSE: AET), CIGNA (NYSE: CI), and Empire BlueCross BlueShield (NYSE: WLP), and that he intends to file suit against Ingenix, Inc, its parent UnitedHealth Group (NYSE: UNH), and three additional subsidiaries.

The six-month investigation found that Ingenix operates a defective and manipulated database that most major health insurance companies use to set reimbursement rates for out-of-network medical expenses. Further, the investigation found that two subsidiaries of United (the “United insurers”) dramatically under-reimbursed their members for out-of-network medical expenses by using data provided by Ingenix.

Read the AG's press release here. Updates, including HPA's statement and NY news coverage, are below the fold.

Continue reading "Cuomo to Sue UnitedHealth and Ingenix For "Manipulating Reimbursement Rates," Calls Ingenix a "Conduit For Rigged Data"" »

February 29, 2008

Industry: Basic Premise of Cuomo's Rate-Scheme Investigation Questionable

Atlantic Information Services reprints an article from Health Plan Week on Attorney General Andrew Cuomo's ongoing investigation into health plans' use of "usual and customary rates" to pay for out-of-network care:

A six-month investigation into rate-setting practices of health plans uncovered "a scheme to defraud consumers," New York Attorney General Andrew Cuomo (D) asserted at a highly publicized Feb. 13 press conference. While results of the investigation quickly earned praise from provider and consumer groups, and could lead to similar probes in other states, industry observers said the attorney general uncovered little more than the strategy behind having provider networks.

. . .

Contractually, the health coverage is linked to the in-network status of providers, explains Sara Rosenbaum, a law professor at George Washington University School of Public Health. "I must say I am at a loss to understand the investigation," she tells HPW.

. . .

According to Karen Ignagni, president and CEO of industry trade group America's Health Insurance Plans, cost-containment strategies used by health plans have helped to keep soaring coverage costs in check. The results of the New York investigation, she asserted, "failed to address the appropriateness of charging out-of-network patients $200 for 'simple doctor visits' lasting '15 minutes,' which equates to a billing rate of at least $800 an hour," she said in a prepared statement.

Rosenbaum says she agrees with Ignagni. "There is no point to paying full charges for out-of-network use; it completely misses the point of having networks and preferred providers. I think the investigation is lacking in basic understanding of modern insurance products, which depend on networks and which provide little coverage for out-of-network use."

Read the full article here.


GAO Disses Medicare Advantage

A report released by the U.S. Governnment Accountability Office February 28, 2008, suggests that Medicare Advantage may be at a disadvantage to traditional Medicare:

Although private health plans were originally envisioned in the 1980s as a potential source of Medicare savings, such plans have generally increased program spending. In 2006, Medicare paid $59 billion to Medicare Advantage (MA) plans--an estimated $7.1 billion more than Medicare would have spent if MA beneficiaries had received care in Medicare fee-for-service (FFS).

Read the complete summary here, with links to the full report.

March 6, 2008

AG Subpoenas More Insurer Records

Crain's New York Business online carried a piece this afternoon about a new round of subpoenas in the AG's investigation into "usual and customary rates" paid by insurers:

Mr. Cuomo says he believes the companies used UnitedHealth Group subsidiary Ingenix to set rates, which resulted in consumers being reimbursed unfair and unjustifiably low amounts. Low reimbursements mean higher out-of-pocket costs for consumers when they choose or need physicians outside their health plans.

. . .

The new subpoenas are part of a case first announced in February. It relies on the state's powerful Martin Act, which provides criminal and civil enforcement powers for publicly traded companies. Mr. Cuomo is basing the other subpoenas on state consumer fraud laws.

. . .

Mr. Cuomo filed a notice in February saying he intended to sue Ingenix, but hasn't yet. He said negotiations with the company continue and the notice allows him to file the civil suit without further notice.

Read the full article here.

The New York Times followed a little later and provided more detail on what was requested:

Cuomo is seeking all e-mail correspondence involving the companies' CEOs, chief operating officers, chief fiscal officers, presidents and employees supervising claims. He also wants any records that might challenge the accuracy of reimbursements that he feels are too low.

The NY Times piece is here.


March 14, 2008

More on Ingenix: Massachusetts Case

Today at TheStreet.com Melissa Davis writes about a recent Massachusetts case that could provide a discouraging precedent for UnitedHealth:

Three years ago, Dr. Michael Davekos set out to prove that he had been underpaid for treatment he provided to a car-wreck victim near Boston. Davekos felt that he charged fair prices for his services and even compared notes with other local chiropractors just to make sure.

Nevertheless, Liberty Mutual maintained that his rates exceeded the charges that are "usual, customary and reasonable" -- or UCR -- for treatment in his area. After Davekos sued, Liberty finally paid most of the bill. But the insurer balked at paying the $394.77 that remained.

Like many insurance companies, Liberty relies on data supplied by Ingenix -- a division of UnitedHealth Group -- to establish rates for health care provided outside of its own network. Recently, Liberty suffered a troubling courtroom setback as a result.

"There is nothing in the record to establish the accuracy or reliability of Ingenix's raw data and, thus, its statistical extrapolations," a Massachusetts judge ruled when reviewing the Davekos case earlier this year. "Indeed, Ingenix itself prints the following disclaimer on its products: 'The database is provided for informational purposes only, and Ingenix disclaims any endorsement, approval or recommendation of data in the database.'"

Read the full article here.

April 1, 2008

2007 Healthy NY Annual Report

The Annual Report for Healthy NY, prepared for the New York State Insurance Department, is now up on the Department's website and available here.

April 14, 2008

Universal Coverage: Eye on Mass.

The L.A. Times Friday covered the maturing Massachusetts universal coverage program:

BOSTON -- Two years after the state's landmark health law was signed, the cracks are starting to show.

Costs are soaring and Massachusetts lawmakers are weighing a dollar-a-pack hike in the state's cigarette tax to help pay for a larger-than-expected enrollment in the law's subsidized insurance plans.

You would think after a lead like that not much good would follow, but no:

But that hasn't dampened enthusiasm at the Statehouse. Leaders there boast that in the two years since former Gov. Mitt Romney signed the law with a choreographed flourish at historic Faneuil Hall, the number of insured residents has soared by nearly 350,000.

Read the rest here.

April 21, 2008

WSJ Profiles CBO Director Peter Orszag's Role in Health Care Debate

Today's Wall Street Journal online profiles Peter Orszag, the Director of the Congressional Budget Office, and shows how prominently Orszag figures in the debate over health care reform.

As the presidential candidates and Congress rev up the debate over the future of health care, Peter Orszag is already playing one of the toughest positions: referee.

Mr. Orszag, a 39-year-old economist, is the director of the Congressional Budget Office, the influential agency charged with toting up congressional bills' impact on the federal budget. Such scoring can sink bills that can't offset their costs with savings -- a serious risk for proposals that aim to expand federal health programs to cover more citizens.

Mr. Orszag increasingly is focusing on health issues, taking an unusually high profile for his nonpartisan office. He has become a prominent speaker at health conferences and co-wrote two pieces in the New England Journal of Medicine. He has launched a blog, cboblog.cbo.gov/, boosted the number of staffers who work on health to 47 from 31 and is seeking to add more. The agency has 235 employees.

Read the full article here. Regular Supraspinatus readers are already on to Orszag; we added a component to our right-hand column a couple of months ago that pulls in the most recent five posts from Orszag's blog.

May 2, 2008

More Woe for Ingenix and Its Clients (Updated)

The Health Law Section listserve this afternoon broke a story on a new case filed April 29, 2008 against Ingenix, Inc. and a number of payors in Connecticut U.S. District Court. The additional defendants include UnitedHealth Group Inc, Oxford Health Plans, Aetna Inc, Cigna Corp, Empire BlueCross BlueShield, Humana Inc, Group Health Ins Inc, Health Ins Plan of NY and Health Net Inc.

The district court case number is 3:2008cv00654

Link to the Justia docket information here.

Hat tip: James G.Fouassier, Esq.

Updated (2:04pm) The complaint itself is here.

The complaint alleges three counts:

I - RICO (18 USC 1962(c))
II - Sherman Act (15 USC 1)
III - Connecticut Unfair Trade Practices Act

Paragraphs 50 to 52 of the complaint reference the NY investigation and quote from AG press conferences.

See earlier Supraspinatus coverage on Ingenix matters by clicking the Ingenix tag at the foot of this post.

May 22, 2008

Mass. Docs Go to the Mat Over Rankings

From Boston.com:

The Massachusetts Medical Society yesterday sought to derail a two-year-old plan under which physicians are ranked for cost and quality measures by health plans associated with the Group Insurance Commission, the agency that oversees health insurance for thousands of public employees at state and local levels.

. . .

Dr. Bruce S. Auerbach, president of the powerful medical society, said efforts to improve the tiering program, part of the insurance commission's Clinical Performance Improvement initiative, have failed.

"There is a right way to do this, and a wrong way - and the Clinical Performance Improvement initiative is definitely not the right way," said Auerbach in a statement.

"We have worked with the GIC for four years to improve its program, and the agency has made changes in some limited areas. However, the GIC has refused to correct the CPI's most glaring problem, which is its ranking of individual physicians using inaccurate, unreliable, and invalid tools and data."

. . .

Dolores L. Mitchell, executive director for the Group Insurance Commission, called the doctors' actions "regrettable."

. . .

Mitchell said she had invited the medical society to join its physician advisory committee, which met periodically to work through problems with physician tiering.

"We agreed to a lot of the suggestions they made," said Mitchell, "but not all of them. They apparently wanted us to agree with all of them."

Read more here.

June 27, 2008

WellPoint Incentivizes Good Care Management

From ChicagoTribune.com:

WellPoint Inc. employees earned a bump in their annual bonuses this year thanks to a new program that monitors care for the health insurer's patients.

WellPoint met or surpassed most goals for improvement in the first year of its Member Health Index program. That means employees saw their bonuses increase by about 10 percent, the company announced Wednesday.

WellPoint is the corporate parent of Empire BlueCross BlueShield, which with approximately five million members is the largest health insurer in New York.

Read the rest of the Tribune story here.

July 22, 2008

HealthNow Zapped With $1 Million Fine

A fine by the State Insurance Department against HealthNow of Buffalo has drawn quite a bit of attention around the state:

The single complaint of an Ithaca woman denied insurance coverage for infertility treatments has led to a more than $1 million fine against HealthNow New York Inc. and an agreement by the insurer to reprocess and pay similar claims for as many as 2,500 women.

The Insurance Department release, quoted above, is here. An article in The Buffalo News is here, the Syracuse Post-Standard coverage is here, and the Rochester Democrat & Chronicle's piece is here. The actual amount of the fine was $1,050,000.00. HealthNow's settlement agreement with the Insurance Department can be accessed on the Insurance Department's website here.

August 6, 2008

CDPHP Fined $600,000

Hard on the heels of HealthNow's million dollar fine, the State Insurance Department has fined CDPHP $600,000, reported in today's Albany Times Union:

Capital District Physicians' Health Plan has been fined $600,000 by the state for not telling members they could appeal denied claims, the Insurance Department said Tuesday.

CDPHP was cited when some of its lines -- its HMO product and several policies run by subsidiary Universal Benefits Inc. -- failed to provide this information for 121,911 claims submitted between 2004 and 2006, the department said.

Read the TimesUnion article here. Disclosure: the contributor of this post is employed by CDPHP.

September 4, 2008

2008 New York Consumer Guide to Health Insurers

The Insurance Department has posted the 2008 New York Consumer Guide to Health Insurers. See it here.

September 8, 2008

AG Settles with Healthfirst for $35 Million

From a September 3 AG press release:

ALBANY, NY (September 3, 2008) Attorney General Andrew M. Cuomo today announced a $35 million settlement with Healthfirst, the largest Medicaid Managed Care provider in New York State. AG Cuomo also announced the indictment earlier this year of James Boothe, a former senior executive of Healthfirst. The settlement was achieved with the assistance of Healthfirst's new management.

Read the press release here. While you are at the AG's website, check out their redesigned web format. I haven't spent a lot of time with it for functionality, but it sure looks nicer than the old layout.

September 9, 2008

Physician Suggests Caution with P4P

Physician pay-for-performance programs are frequently in the news as Medicare and many other payors inplement them. In today's New York Times, Long Island cardiologist Sandeep Jauhar takes a thoughtful look at the downside to P4P:

Doctors have seldom been rewarded for excellence, at least not in any tangible way. In medical school, there were tests, board exams and lab practicals, but once you go into clinical practice, these traditional measures fall away. At first glance, pay for performance would seem to remedy this problem. But first its deep flaws must be addressed before patient care is compromised in unexpected ways.

Read the full piece here.

September 15, 2008

MSSNY Releases Physician Survey

The 9/8 Albany Times Union covered a recent MSSNY survey on managed care practices:

New York doctors say they change the way they treat patients based on restrictions from insurance companies, according to a survey released today by the Medical Society of the State of New York. The survey, based on responses from more than 1,200 New York physicians, appears in the September issue of News of New York, the medical society's monthly publication.

I spent a little time with the survey and found it amateurish and not particularly useful. Here's question 4, for example:

Have you ever had an insurance carrier restrict your ability to refer patients to a physician you believed would best handle your patients medical needs?

And here's question 3:

Have you ever had to change a prescription medication because of restrictions from an insurance carrier?

The questions seem designed to elicit red meat responses of the sort that merely point out the obvious. Managed care products have networks, for example, which means -- and it's no secret -- that physicians can't refer patients to just anyone (and still expect coverage). Having a tiered pharmacy benefits means --unsurprisingly-- that providers can't prescribe just any drug. Everyone is somewhat displeased in this arrangement; but no one has yet come up with a better one.

The Times Union piece is here. For what it's worth, the MSSNY survey itself is here in PDF.

November 7, 2008

U.S. News & World Report Releases 2008 Health Plan Rankings

U.S. News & World Report yesterday released its 2008 rankings of the 202 health plans in the United States. Topping the list this year was Harvard Pilgrim Health Care of Massachusetts, with a score of 91.2 out of possible 100. Tufts Associated Health Maintenance Organization, also of Massachusetts, placed second and also scored a 91.2. Third went to Harvard Pilgrim Health Care of New England in New Hampshire with a score of 90.6.

New York plans again fared well, with Albany-based Capital District Physicians' Health Plan leading at 14th with a score of 87.2, Independent Health Association of Buffalo at 17th with a score of 87, Preferred Care of Rochester at 22nd with a score of 86.8, and Excellus in Rochester at 25th with a score of 86.8.

See all the listings here.

Disclosure: This contributor is employed by Capital District Physicians' Health Plan.

November 13, 2008

At Behest of NY Delegation, AMA Takes Position on "Code of Conduct" for Health Plans

Building on the survey it publicized back in September, the New York delegation to the AMA carried its efforts a step further by offering a resolution in the AMA House of Delegates "calling upon the American Medical Association to create and implement a Code of Conduct for the health insurance industry." The resolution was approved unanimously, according to a MSSNY press release issued November 10.

Of particular significance to the physician community, the adopted resolution calls upon the AMA to also develop a mechanism to monitor health plan compliance with the "Code of Conduct" and to disseminate widely health plan compliance rates to physicians and patients across the country. "While development of a health plan code of conduct is a valuable first step, the critical element of this resolution is the mechanism that will be employed to monitor health plan compliance with the Code of Conduct," said Michael Rosenberg, MD, President of the Medical Society of the State of New York. "Properly constructed, this tracking mechanism will provide employers and the public with substantive data to empower and inform their decision-making regarding their choice of health insurer. Moreover, the information that is collected can be used by State Attorneys Generals to enforce compliance or to seek significant changes to health plan policies and procedures to protect and assure patient access to medications and treatments prescribed by their practicing physicians," added Dr. Rosenberg.

I'm not entirely sure what to make of this. What I am sure of, though, is that adding state attorneys general to the already large list of entities regulating health plans is a bad idea.

In New York, health plans are already regulated directly by two state entities: the Insurance Department and the Department of Health. Both carry out extensive periodic audits, and both conduct routine investigations following up on complaints. In addition, health plans participating in the Medicare Advantage or Medicare Part D programs are subject to intensive oversight from CMS. These agencies often end up working at cross purposes, where certain activites mandated by one entity result in adverse audit findings when reviewed by another.

The heads of the insurance department, health department, and CMS are all appointed. That's no guarantee of insulation from political influences; but the individuals that end up running these agencies are usually not interested in winning elections, and therefore have less reason to play up to popular sentiment.

Attorneys general, on the other hand, are elected. It is in the nature of their office, therefore, to look for issues that play to popular sentiment and to exploit those issues for the publicity and popularity that ensures re-election or, in many cases, election to a higher office.

In addition, at least in New York, the Attorney General already has authority over health plans, in particular when consumer deception is alleged. Consumer protection is a common interest, is the AG's proper bailiwick, and in fact is in keeping with the publicly elected nature of the office. But physicians are a special interest, not a common interest, and I can't think of a good reason why a powerful authority like the AG should become the legislated champion of one particular special interest over any other.

If the AMA indeed thinks a code of conduct is required (which is another topic altogether, but a fight I'm not picking today), its seems that there would be ample opportunity to implement such a code through existing lines of authority. Indeed the New York Insurance Department has already gone in that direction. This would be preferable to the introduction of (yet) another nuts-and-bolts-level regulator to the health insurance industry.

November 20, 2008

AHIP, BCBSA Offer Quid Pro Quo: Universal Coverage for Individual Mandates

The New York Times reports today:

The health insurance industry said Wednesday that it would support a health care overhaul requiring insurers to accept all customers, regardless of illness or disability. But in return, the industry said, Congress should require all Americans to have coverage.

. . .

In separate actions, the two trade groups, America's Health Insurance Plans and the Blue Cross and Blue Shield Association, announced their support for guaranteed coverage for people with pre-existing medical conditions, in conjunction with an enforceable mandate for individual coverage.

Read more here.

January 19, 2009

United/Ingenix and AMA Settle Out - Roundup

Reported on HC Pro Friday, 1/16:

Two settlements involving UnitedHealthGroup this week will require the nation's largest health insurer to shell out $400 million, cease two databases run by its subsidiary Ingenix, and help fund a new independent database that will collect price information.

As part of the settlements, UnitedHealth Group will pay $50 million to develop and own a new independent database that will replace Ingenix's two databases, Prevailing Health Charges System and Medical Data Research. The money will also fund a new healthcare consumer Web site to provide market prices for patients. In addition, Hartford, CT-based health insurer Aetna has agreed to pay $20 million to help fund the new database.

The New York Times ran an editorial praising Attorney General Andrew Cuomo:

New York's attorney general deserves thanks for forcing the industry to adopt a fairer and more transparent system for determining out-of-network reimbursements. It has been a long time coming.

The AMA "claimed victory" in their press release and touted the size of the settlement:

The American Medical Association (AMA), along with the Medical Society of the State of New York and the Missouri State Medical Association, claims victory with the settlement agreement reached today in the lawsuit against United Health Group. The $350 million settlement marks the largest monetary settlement of a class action lawsuit against a single health insurer in the U.S.

The AG's press release gives a bullet-point overview of his agreement with United:

Under Attorney General Cuomo’s agreement with United:
  • United will pay $50 million to establish a new, independent database run by a qualified nonprofit organization;
  • The nonprofit will own and operate the new database, and will be the sole arbiter and decision-maker with respect to all data contribution protocols and all other methodologies used in connection with the database;
  • The nonprofit will develop a website where, for the first time, consumers around the country can find out in advance how much they may be reimbursed for common out-of-network medical services in their area;
  • The nonprofit will make rate information from the database available to health insurers;
  • The nonprofit will use the new database to conduct academic research to help improve the health care system;
  • The nonprofit will be selected and announced at a future date.

February 4, 2009

More on Ingenix: AG Reaches Agreement With MVP, Threatens CDPHP

From an AG press release today:

NEW YORK, NY (February 4, 2009) – Attorney General Andrew M. Cuomo today announced the expansion of his historic reform of the nationwide healthcare reimbursement system to Upstate New York. Cuomo has reached an agreement with the Schenectady-based insurer MVP Health Care, Inc. in his ongoing drive to eliminate the defective and conflict-of-interest ridden Ingenix database and generate fair, out-of-network reimbursement rates for patients. Cuomo also announced that he has filed a five-day notice to file suit against another Upstate health insurer, Capital District Physician’s Health Plan (CDPHP), for failure to embrace these reforms.

Read more here.

Disclosure: The contributor is employed by CDPHP.

February 10, 2009

AMA Sues Aetna, Cigna Over Ingenix

Having concluded its lawsuit against UnitedHealth a short while ago (see the Supraspinatus roundup here), the American Medical Association is taking aim at two more national payors, Aetna and Cigna:

The American Medical Association said Tuesday it is suing health insurers Aetna Inc. and Cigna Corp. for allegedly using rigged data to under-reimburse physicians.

The medical associations of several states including Connecticut, New Jersey and New York, are suing the companies as well, as are individual physicians.

Two lawsuits were filed in New Jersey federal court late Monday accusing the companies of using a system aimed at underpaying physicians and forcing patients to pay excessive costs for more than a decade. They allege that Aetna and Cigna used skewed data from UnitedHealth Group's Ingenix subsidiary.

Read the rest in an AP wire here.

May 4, 2009

NY Managed Care Report

The Health Department has released its 2008 Managed Care Plan Performance report. The report is generally favorable:

Commercial plans exceeded the national averages in several measures of care for children and adults, including well-child and preventive care for children and adolescents, annual monitoring of patients with persistent medications, and Chlamydia screening. For measures where commercial plans outperformed Medicaid and Child Health Plus, the differences continued to diminish in 2007, indicating a decrease in health care disparities between the two populations.

New York State’s Medicaid plans this year exceeded the national averages for over 80 percent of this year’s quality of care measures. Medicaid plans in New York State exceeded national benchmarks among members with diabetes rates for all diabetes care measures (eye exam, nephropathy screening, lipid profile, lipids controlled and blood pressure controlled) demonstrating health plans' ability to successfully manage the chronic care needs of this vulnerable population.

The report is available online here.

December 14, 2009

For-Profit Insurers Draw Executive Fire Over Dividends

From today's Albany TimesUnion:

Three for-profit insurance companies want to pay more than $1.2 billion in dividends from premiums collected during 2008 in New York state to their out-of-state corporate parents, drawing the ire of Gov. David Paterson and other officials.

Read more in the TimesUnion article.

January 28, 2010

Health Plan Association Sues Over Assessments

The Albany Business Review covers a recent lawsuit by the trade association for New York health plans:

The New York Health Plan Association has joined the New York Insurance Association Inc. in suing New York state over what is says are illegal assessments on insurance companies to fund agencies unrelated to insurance.

The suit, which NYIA filed in State Supreme Court in Albany on Jan. 13, challenges the levy on insurers known as the 332 assessment and how the funds are used. By state law, the assessments are to be used only for the operating expenses of the New York State Department of Insurance, but are increasingly being used for other purposes.

HPA's press release from January 26 provides some more detail:

Since 2000-2001, DOI’s budget has more than quadrupled and the amount of sub-allocations has increased by more than 22 times. Of DOI’s $555.5 million budget for the 2009-2010 State Fiscal year, only $138 million represented actual operating expenses.

February 5, 2010

Aetna Fined $750,000 for HealthyNY Violations

Posted yesterday online at the Hartford Courant:

Aetna Health Inc. paid a $750,000 fine as part of a settlement with the New York Insurance Department related to the company administering an affordable healthcare plan for the state.

Aetna is the administrator for the state-subsidized program Healthy NY, which assists small business owners in providing affordable health insurance to their employees. The program is also available to individuals without insurance.

Aetna's violations included failing to provide a required 30-day notice of rate increases to about 946 members in 2007, failing to provide notice to 1,406 terminated workers of their rights to convert to another policy, failing to report enrollment data from May 2007 through August 2008, and failing to respond to Insurance Department requests for data in March 2008.

The New York Insurance Department press release is available also.

March 4, 2010

American Cancer Society Questions Value of Prostate Cancer Screening

The March 4 Albany Times Union covers recent guidance from the Amercian Cancer Society concerning prostate cancer screening:

Months after experts discounted the importance of routine mammograms and Pap smears for many women, the American Cancer Society is warning more explicitly than ever that regular testing for prostate cancer is of questionable value, too, and can do men more harm than good. The cancer society has not recommended routine screening for most men since the mid-1990s, and that is not changing. But the organization is urging doctors to talk frankly with their patients about the risks and limitations of the PSA blood test when offering it.

The updated guidelines urge doctors to stop routinely giving the rectal exam.

Health insurers in New York will not be able to take advantage of the opportunity this policy presents to pare non-recommended screenings out of benefits pacakges. Since 2000 New York has had a prostate cancer screening mandate (see e.g. Ins. Law 4303(z-1) for how this pertains to HMO coverage) that requires most policies to cover screening: (a) for men of any age with a history of prostate cancer: (b) annually for asymptomatic men over 50; and (c) annually for asymptomatic men 40 and over with a family history of prostate cancer or "other prostate cancer risk factors."

This is a good example of a legislated benefit mandate failing to keep pace with medical developments, thereby subjecting patients to unnecessary and potentially harmful services while directly adding to the cost of health insurance premiums.

April 15, 2010

Insurance Department Proposes "Discretionary Clauses" Regulation

The State Insurance Department has posted a regulation concerning "discretionary clauses" in health insurance contracts:

Federal courts have interpreted discretionary clauses under the Employee Retirement Income Security Act (ERISA), codified as Chapter 18 of Title 29 of the United States Code, as limiting judicial review of the provisions of insurance policy forms. If a policy form contains a discretionary clause, a court cannot interpret the provisions of the policy de novo, and is limited in its review as to whether the decision or interpretation of the insurer or other administrator was arbitrary and capricious. This limited standard of review gives the insurer or administrator wide discretion, which can serve to negate essential provisions of policy forms, as well as statutorily required appeal rights.

. . .

Discretionary clauses are therefore contrary to sections 3201(c) and 4308(a) of the Insurance Law, which authorize the superintendent to disapprove a policy form if it is "prejudicial to the interests of policyholders or members or it contains provisions which are unjust, unfair or inequitable" or if its provisions "encourage misrepresentation or are unjust, unfair, inequitable, misleading, deceptive, or contrary to law or to the public policy of this state."

Read the entire proposed regulation on the Insurance Department website. Comments on the proposed regulation are due by May 5, 2010.

May 17, 2010

Judge Clears HIP-GHI Merger

From Crain's New York Business website May 13:

A federal court judge has ruled against the City of New York in its antitrust case against Group Health Inc. and the Health Insurance Plan of Greater New York, a lawsuit that sought to unravel the merger between the two insurers.

On Tuesday, Judge Richard Sullivan of the U.S. District Court for the Southern District of New York granted the insurers' motion for summary judgment and also ruled against the city's request to amend its original complaint against the companies.

Read the rest of the article on the Crain's website.

May 24, 2010

Managed Health, Inc. Fined One Million Dollars

From the New York State Insurance Department's website April 29:

Managed Health, Inc. (MHI), a health maintenance organization (HMO), and the New York State Insurance Department have agreed to a settlement, including a fine of $1 million, for infractions relating to MHI’s failure to properly license its sales agents in regard to its Medicare Advantage business and to timely adjudicate and pay claims related to its commercial policies, Insurance Superintendent James J. Wrynn announced today.

The Department's press release details the additional violations and includes a link to the settlement agreement.

June 11, 2010

MA Eyes Health Plans

From the Boston Globe on boston.com:

State officials said they sent letters to three health insurers earlier this year asking them to accept more intense oversight and supply additional data because of concerns about their financial health.

One of the insurance companies has agreed to administrative oversight, while regulators are negotiating details with the other two, the officials said. Administrative oversight is a first step regulators take when they determine there is a need to monitor the financial condition of insurance carriers more closely. It does not mean the companies are insolvent.

Read the rest of the article on boston.com.

That this is happening should come as a surprise to exactly no one. Although portrayed in the media as a "raking-in-billions" industry, the margin for health insurance is actually rather thin. Earlier Massachusetts health reforms attempted "universal coverage," increasing demand for health services and pushing up the cost of care while giving insurers no additional offsetting leverage. The State's arbitrary imposition of rate caps was the kicker. Increasing expenses without increases revenue leads to losses, which are sustainable only for so long.

June 21, 2010

Coming Soon: Prior Approval of Insurance Premiums

The Rochester Democrat & Chronicle explores the impact of New York's return to a "prior approval" process for health insurance premiums:

Major changes in the way health insurance premiums are set and regulated are coming to the Rochester region.

The state Legislature, as part of a recent budget extender bill, adopted the "prior approval" approach to health insurance premiums, meaning that companies like Excellus BlueCross BlueShield and MVP Health Care must submit proposed rates for state review and approval before they are imposed. The regulatory approach is similar to that long required for public utilities.

Read the rest of the article on the Democrat&Chronicle website.

July 1, 2010

Mass. Residents Gaming Health Insurance System (Surprise!)

Coming as a surprise to exactly no one that actually thought about the Massachusetts health reform effort when it was being debated:

The number of people who appear to be gaming the state’s health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a long-awaited report released yesterday from the Massachusetts Division of Insurance.

Read the rest of the article on Boston.com.

The report itself is available on the Mass. Division of Insurance website. Among the major findings:

  • After adjusting for higher premiums paid by individual subscribers (e.g. through
    group size adjustment and age factors), the cost of the merger is estimated to be 2.6% (ranging from -4.3% to 5.9% per carrier) or 1.1% to 1.6% higher than the 1.0% to 1.5% impact that had been projected prior to the merger.

  • In 2006, individuals and small groups who terminated within a year had loss ratios 2.2% lower than average for the combined markets. However, in the Merged Market, the loss ratio of those terminating within a year is 8.8% higher than average. This indicates adverse selection may be occurring.

August 16, 2010

HANYS Comments on MLRs

The Healthcare Association of New York State (HANYS), with the Multi-State Managed Care Coalition, submitted comments about the calculation of Medical Loss Ratios (MLRs) to the National Association of Insurance Commissioners (NAIC), which is meeting this week in Seattle. The Patient Protection and Affordable Care Act required the establishment of MLR standards and the U.S. Department of Health and Human Services (HHS) requested assistance from the NAIC with the development of those standards. Click here to read the HANYS press release and here to read HHS's earlier letter to the NAIC.

August 17, 2010

Governor Signs "Ian's Law", others

Governor Paterson has signed a bill, Ian's Law, that addresses the discontinuance of a class of health insurance policies when such action is based on claims experience or a health status-related factor. Although such an action is prohibited by current law, the new law strenghtens notice and enforcement provisions and creates a new process to provide certain insureds relief when they are negatively affected by a discontinuance, even when such action is entirely proper. Senator Schneiderman, the lead Senate sponsor of the bill and current attorney general candidate, achieved national press coverage on the issue.

Paterson also signed a bill making changes to the False Claims Act that will give OMIG increased jurisdiction and another allowing direct admission into "Enhanced Assisted Living Residences" - fixing what was largely seen as a technical flaw in the original 2005 Assisted Living Reform Act.

The Governor's press release indicating all bills recently acted upon is here

August 30, 2010

Insurance Department's 2010 Consumer Guide to Health Insurers Hits the Street

The New York State Insurance Department has released its 2010 Consumer Guide to Health Insurers. Here's a snippet from the Department's press release August 25, 2010:

According to data contained in the guide, consumers seeking to reverse health plans' denials of coverage won 33,921 internal appeals against commercial insurers in 2009 out of 71,787 cases closed. Consumers won 2,332 reversals in the 5,968 appeals closed against HMOs and 4,329 of the 8,946 appeals closed against non-profit insurers.

Read the Department's release or access the complete guide on the Insurance Department's website.

NY Insurance Department Issues $716K in Prompt Pay Fines

As reported in the Albany Business Review August 24:

Twenty health insurers and health maintenance organizations (HMOs) have been fined a total of $716,800 for not making timely payments on undisputed insurance claims.

Find out which plans were fined by clicking through to the Business Review article, or see the Insurance Department's press release.

October 5, 2010

Insurance Department Fines Aetna $850K

From the Insurance Department's website yesterday, October 4:

Health insurer Aetna paid a fine of $850,000 to settle charges including incomplete disclosures on “explanation of benefit” forms to consumers, and violations of New York’s prompt pay requirements, New York State Insurance Superintendent James Wrynn announced today.

Read the rest of the press release on the Insurance Department's news index or link to the stipulation for more details.

October 13, 2010

Insurance Department Fines HealthNew $1.9 Million

On the Insurance Department's website today:

Two Health Net companies paid a $1.9 million fine to settle allegations including not providing consumers with the required information on their “explanation of benefit” forms and not paying certain claims on time, New York State Insurance Superintendent James Wrynn announced today.

Read the Department's press release on its latest updates page.

November 22, 2010

Insurance Department Releases 2010 Managed Care Guide

Last week the NY Insurance Department released its annual Managed Care Guide for 2010. Download it in .pdf format from the Insurance Department's website.

December 1, 2010

National Debt Commission's Proposal Includes Medicaid Reforms

On December 1, President Obama's National Commission on Fiscal Responsibility and Reform released its report with recommendations for reducing the United States debt. Pages 36 to 42 of the report focus on how reforming the health care system can contribute to this goal. Among the suggestions in the report are several Medicaid-related proposals such as restricting or eliminating what the Commission calls the "Medicaid tax gimmick," placing dual eligibles in Medicaid managed care, and reducing funding to states for Medicaid administrative costs. Other recommendations in the report include cutting Medicare payments to hospitals for bad debts, medical malpractice reform, and reforming or repealing the CLASS Act long term care insurance program established by the Patient Protection and Affordable Care Act. Read the report here.

March 10, 2011

Medical Homes in New York Hudson Valley

Government Health IT carried an article yesterday (3/9/11) on the advancement of the patient-centered medical home model in New York's Hudson Valley:

Six health plans in a large scale project demonstrating patient-centered medical homes in New York's Hudson Valley paid incentives of $1.5 million to 236 primary care physicians in 11 practices. These physician practices affect nearly half a million patients in the region.

The incentives were paid to providers for converting their practices to patient-centered medical homes, a team-based model, and providing the enhanced services that are part of that transformation, according to a March 9 announcement from the Taconic Health Information Network and Community (THINC).

Read the rest of the article at Government HealthIT's website.

August 22, 2011

NYC loses EmblemHealth antitrust case | Crain's New York Business

Reported August 19 in Crain's New York:

The City of New York lost its appeal to block the merger between two New York City insurers, clearing the path for the two companies to legally merge. The U.S. Court of Appeals for the Second Circuit on Thursday ruled against the City of New York in its antitrust case against Group Health Inc. and the Health Insurance Plan of Greater New York, a lawsuit that sought to unravel the merger between the two insurers.

Read the rest of the article here on the Crain's website. Link to the Second Circuit opinion here.

October 12, 2011

Health Insurers Ask to Keep Rate-Increase Data Secret - NYTimes.com

From the New York Times October 12th online:

Major health insurance companies seeking steep premium increases in New York have submitted memos to state officials to justify the higher rates. Now they are fighting to keep the memos from the public, saying they include trade secrets that competitors could use against them.

. . .

Mr. Lawsky's decision would add New York to a list of at least 12 states that make insurance company filings public. It fits with an Obama administration effort, part of the federal health care reform, to curb health care costs through more oversight and transparency when insurance rates are set.

Read the full article on the New York Times website.

October 26, 2011

State Report on Managed Care Plan Performance is Available Online

The Department of Health released its 2011 Managed Care Plan Performance report. From the DOH website:

The report, which is compiled annually by the DOH, highlights performance measurements for managed care plans, reflecting specific areas of public health and customer satisfaction. In addition, the report includes details about the counties served by plans and enrollment figures.

The report is available for four insurance types (commercial HMO, commercial PPO, Child Health Plus and Medicaid) and grouped into six regions of the state: Central, Hudson Valley, Long Island, New York City, Northeast (which includes the Capital District and areas to the North), and Western.

See the release here or link directly to the 2011 report.

October 28, 2011

AMA Study on Anti-Competitive Conditions an Exercise in Myopia

This Wednesday the American Medical Association released a study bewailing the "anti-competitive conditions" in 4 of 5 American insurance markets. "New data presented by the AMA demonstrates the degree of anti-competitive market clout that some health insurers have gained through mergers and acquisitions" the AMA reported breathlessly in its press release.

Readers might be forgiven for glancing quickly at the AMA release (you can't get the study itself unless you fork over $150) and thinking, "no wonder premiums are so high. If there were more insurers to compete with each other, premium prices would be lower."

Of course, that would be true if insurance premium was purely a creature of supply and demand as it relates to coverage. But 85% of health insurance premium is a pass-through of the cost of care. Therefore, the local supply and demand of health care services is the predominant factor in determining premium. That being true, the fewer insurers in a market, the lower the premium.

Consider that insurers are, more than anything, bulk purchasers of health care. The unit price of care for each proivder is determined up front. The insurer calculates premium by projected usage and then multiplying usage by the price of care (about 85% of the total), and then adding in the administrative costs of running the health plan (about 15% of the total).

Now if you are one of many providers of care in a given market, and there is only one entity showing up to purchase your product, that one entity has the leverage. The provider has no one to play off of to negotiate a higher price. Insurers can negotiate lower rates, and providers naturally hate this.

If you introduce a second insurer into the market, however, the provider's leverage increases. The provider can be more selective about whose network it decides to participate in. It can hold out against one insurer for price increases while still securing payments from the other. Insurers have less leverage to negotiate lower rates, and providers naturally like this.

On the selling side, competition can admittedly incentivize insurers to find innovative ways of lowering their administrative costs. Of course, even if an insurer finds a way to cut its administrative costs by, say, 10% --which would be stupendous, really--- that would translate into all of a 1.5% premium reduction. Reducing admin is small potatoes compared to reducing the cost of care.

Insurer competition in a given market benefits health care providers more than their patients. This simple understanding illustrates why the AMA watches this issue so carefully.

Press Release - October 27, 2011: "Lawsky Announces Five More Health Insurers Agree to End Secrecy over Rate Increases"

The New York Department of Financial Services (formerly the Insurance Department) announced yesterday that a number of additional health plans have folded their hands in opposition to the Department's rate filing transparency initiative.

Following the lead of United Health, Aetna, EmblemHealth, which also does business in New York as GHI and HIP, Empire HealthChoice, which does business as Empire Blue Cross, Excellus and HealthNow formally withdrew their objections and agreed with the Superintendent that rate filings should be made public. As a result, six large health insurers-including the five largest-with 85 percent of the prior approval segment of the market covering 2.4 million New Yorkers have now taken a position in favor of full disclosure.
Read the full press release on the Department's website.

November 2, 2011

Governor signs bill mandating insurance for autism care - Times Union

The Albany Times Union covers the new New York autism mandate.

Following years of debate and false starts, Gov. Andrew Cuomo signed a bill Tuesday requiring insurers to cover screening, diagnosis and treatment of autism.

"The children will get the help, the families will get the support," Cuomo said before signing the measure, which was passed by lawmakers last session.

The law could save families with autistic children tens of thousands of dollars, although it will likely contribute to an increase in health insurance premiums in the state. The law takes effect on Nov. 1 of next year.

So it goes. Read the rest of the article at the Albany Times Union website.

February 6, 2012

Unintended (or Intended?) Consequences


In case you missed it -- In a recent NY Times "Opinionator" column, Ezekiel Emanuel and Jeffrey Liebman (both former advisers to President Obama) predicted that health insurers will be "extinct" by 2020 because ACOs will make them "superfluous." To support that theory, the authors explained why they think ACOs will have more permanence and do a better job of controlling costs and improving care than the HMOs that came before them. Read the column here.

August 24, 2012

DOH's "Get-Tough Approach" to Medicaid Managed Care Plans


A recent Businessweek article examined New York State's approach to improving the quality of care provided by Medicaid managed care plans such as WellCare. In the article, Jason Helgerson, the state's Medicaid Director, elaborates on DOH's enforcement strategy. The article highlights the predominance of not-for-profit plans, payments for good performance, and the state's 85 percent MLR requirement for Medicaid managed care plans as reasons why New York is succeeding where other states have not.

For those of you with experience representing Medicaid plans in New York as well as other states, how does DOH's approach to quality compare to the approach taken by other states?

December 23, 2014

Obama Administration Investigating Discriminatory Benefit Designs

Yesterday's New York Times reports that the Obama administration intends to investigate companies in the federal insurance marketplace it suspects of engaging in unlawful discrimination against people with AIDS, mental illness, diabetes and other costly chronic conditions.

The administration intends to focus benefit design aspects such as formulary structure, member cost-sharing, and prospective utilization review.

Read the full NY Times article here.

February 25, 2015

Montefiore Profiled as Care Management Reimbursement Model

There is a lengthy laudatory writeup in Capital New York on Montefiore Medical Center's success with the care management reimbursement model:

In a care management model, a health system like Montefiore receives a certain portion of the insurance premium regardless of how much, or the type of care it provides. If Montefiore can keep that person healthy for less than the premium, it keeps the difference. If it can't, it eats the loss.

These arrangements provide both risk and opportunity for health systems in ways that have never before existed.

So far, Montefiore has been one of the nation's success stories.

It was one of only 32 health systems in the nation--and the only one in the state--to join the Pioneer Accountable Care Organization, a pilot Medicare savings program created by the Affordable care Act. The health system reported saving Medicare $24.5 million in its first year, utilizing some of the same strategies on thousands of patients that it does on Pratt.

See the entire article here.

May 26, 2015

CMS Posts Sweeping New Medicaid Managed Care Regs

CMS has released the pre-publication version of the long-awaited and highly anticipated Medicaid managed care regulations. The proposed rule is intended to "modernize the Medicaid managed care regulations to reflect changes in the usage of managed care delivery systems." According to the summary accompanying the proposed rule, it would:

  • align the rules governing Medicaid managed care with those of other major sources of coverage, including coverage through QHPs and Medicare Advantage plans
  • strengthen actuarial soundness payment provisions to promote the accountability of Medicaid managed care program rates
  • promote the quality of care and strengthen efforts to reform delivery systems that serve Medicaid and CHIP beneficiaries
  • ensure appropriate beneficiary protections and enhance policies related to program integrity, and
  • require states to establish comprehensive quality strategies for their Medicaid and CHIP programs regardless of how services are provided to beneficiaries

The document is scheduled to be published in the June 1 Federal Register with comments due no later than July 27, 2015.

View the pre-publication version of this rule here.

About Managed Care

This page contains an archive of all entries posted to HEALTH LAW SECTION BLOG in the Managed Care category. They are listed from oldest to newest.

Long Term Care is the previous category.

Mental Health is the next category.

Many more can be found on the main index page or by looking through the archives.