Tuesday, July 17, 2018

A million here, a million there...

Over the years, we've reported on a number of health insurance claims that hit (and/or exceeded) the magic $1 million mark. These have always been rare, partly because, even in today's inflated medical expense environment, it takes a lot of medical care to reach that summit:

"Olive-McCoy, 44, has hereditary angioedema (HAE), a life-threatening disease so rare that many doctors have only read about it ... the price of just one of Olive-McCoy’s drugs will be about $600,000 this year ... she has received hospital bills for more than $1 million"

But this is apparently changing:

"The number of million-dollar medical claims has nearly doubled, with cancer care remaining the most costly health condition"

Cancers of various types accounted for almost $800 million in health insurance reimbursements fro 2014 through last year. And the total number of million dollar patients nearly doubled: from 104 in 2014 to almost 200 in 2017.

What's also interesting  to me  is that cancer was the #1 culprit: I would have guessed that the opioid crisis would have been to blame, but that doesn't seem to even register on the radar. Granted, these are from a study of self-funded plans from one carrier, but still; it's not as if employees and their dependents are immune.

What wasn't a surprise is the low percentage of folks who experienced these claims:

"Patients with claims of more than $1 million represented only 2% of the total number of stop-loss claims from 2014 to 2017."

But that low number comprised almost one-fifth of the total dollar paid out.

So, 2% ate up 20%. Interesting.

Monday, July 16, 2018

La plus ca change

That was then (early 2016):
"So we have one woman who went from the AFL-CIO to AHIP to EmblemHealth.
But who replaced her?
Well, that would be the lovely and talented Marilyn Tavenner, who came to AHIP directly from her previous gig as Administrator of the Centers for Medicare and Medicaid Services, which is part of the bureaucracy tasked with implementing ObamaCare."
And this is now:
Seems like the womenfolk in the highest echelons of the health "care" industry do very well for themselves.

[Hat Tip: Life Insurance Larry]

Health Care Currying favor?

India faces an interesting challenge: how to provide health care to its most vulnerable (ie poorest) citizens. Currently, health care financing and delivery models are left up to the individual states (not necessarily a terrible idea, but that's for another post). The country's federal government has been tasked with rolling out private health insurance to some 500,000 of its citizens, which is proving - as one might imagine - quote a challenge:

"Almost five months after announcing the ambitious program, the government is still working to lock in hospitals and insurance companies in time for its planned August launch."

One challenge is infrastructure: "Although ... the IT infrastructure has been put in place, the involvement of hospitals — public and private — and insurance companies was still to be finalized." Sounds familiar.

The other problem is something we also face: how to provide care to an ever-expanding population with a shrinking supply of providers?

"It will not be possible for health care providers to respond to such a huge expansion of coverage without substantial investment in medical facilities and manpower,” said Owen O’Donnell, associate professor at the Rotterdam-based Erasmus School of Economics. “Without that, the extension of coverage risks being nominal rather than real.”

I bet. And again, similar to what we see here with, specifically, expansion of Medicaid "coverage" with narrower and narrower networks from which to obtain actual care. Wonder if our Indian friends will be more successful.

At least they're trying a privatized alternative, even as we plunge headlong toward single payer. What do they know that we don't?

[Hat Tip: FoIB Allison Bell]

Friday, July 13, 2018

Health Care Economics 1201

Case Study #1, The Much Vaunted National Health Service©:

As we've previously noted, MVNHS© docs aren't doing much better:

"A "talented" junior doctor who had spoken about the pressures of working in an A&E department has been found dead at her home."

So, low pay, horrendous workload, "free" health care. What's not to love?

Case Study #2, Direct Primary Care Fees:

As regular readers know, we've been longtime fans of the DPC model, while acknowledging its (substantial) limitations. But this is something that's been under our radar, and bears consideration. That is, DPC practices are, by definition, independent, and free to set their own fee schedules and rates. But this also means that it's currently kind of a "wild west" in terms of defining what is - and is not - a true DPC office. For better or worse, there doesn't seem to be a nationally recognized "DPC Association" that offers some kind of consistency across various practices. Now, I kinda like that, but it also means major 'caveat emptor' warning should apply.

Case Study #3, Medicaid as Flawed Model

This one stands pretty much on its own, I'll add only that a better question might be "Why would people want Medicaid-For-All, again?"

Thursday, July 12, 2018

Artwork Liability Update

Last month, we reported on the strange case of the child versus the glass sculpture:

"[T]he young lad, attending a wedding reception replete with expensive (and apparently fragile) art work, who (apparently accidentally) knocked over a priceless glass statue."

Well, maybe not "priceless:"

"A Kansas mother says an insurance company wants her family to pay $132,000"

Now, if you're wondering about how that seemingly-arbitrary value was assigned, well, it appears to have been the sales price of said sculpture [ed: notwithstanding that "asking price" isn't necessarily "what someone ultimately pays"]. In the event, there was some dispute about whether or not the child actually touched, let alone knocked over, the piece.

The good news is that this is now settled:

So, that's that, and we appreciate the tip from FoIB NARNfan who also asks (one presumes rhetorically) "How much would you get if you stole it and fenced it?"

The world may never know.

From the P&C Files: Heads' up, Campers!

[Hat Tip: SoIB Gail S]

Wednesday, July 11, 2018

New Claims Tech

If you're fortunate enough to (still) have a PPO-type health insurance plan (coverage for both in- and out-of-network expenses), then you probably know the frustration of actually filing those OON claims. What if there was a simple, inexpensive way to get them paid with little or no hassle?

Well, as you might have guessed, there's an app for that:

"Reimbursify’s smart dashboard manages your claims, helping you to make new claims, and keep track of pending reimbursements."

There's even a feature that helps if your claim is denied.

There's also a "Provider Pro" version for doc offices; this waives the $2 per-claim filing fee. And the folks behind the app promise to keep your personal health info as safe as possible.

The app itself is free, and available for both Apple and Android devices.

Oh, and it may be especially useful for folks who choose both insurance and Direct Primary Care (since DPC folks are by definition out-of-network).


[Hat Tip: Vatsal G. Thakkar MD]

Hot Summer 'Review

Our good friend Peggy Salvatore hosts the July Health Wonk Review. As she notes, it's "short, sweet and HOT!"

Posts include Joe Paduda's take on high deductible plans, and Tom Lynch's on new Medicaid work rules in the Bluegrass State.

Check it out!

MVNHS© vs Medical Tourism


Tuesday, July 10, 2018

On Risk Adjustment

The only permanent "R" of Obamacare's 3R's, Risk Adjustment, was implemented in 2014 with the impression that it would keep insurers from cherry picking the healthy risk versus the unhealthy risk. Using an actuarial formula insurers would predict health care costs based on a variety of factors.

In a nutshell, the program would take money from insurers who had lower risk members and provide funding to insurers who disproportionately attracted higher risk members. There were two goals: minimize adverse selection and stabilize premiums.

So what happened?

A handful of mainly small insurers got clobbered. The most heavily hit were Obamacare's newly created CO-OP's. Many of these start ups underfunded premiums to be competitive. They took in a large portion of good risk and had priced for it. But when Risk Adjustment (RA) was factored in they had to pay huge amounts of their premiums to other insurers who had higher risk scores.

Three CO-OPs - Minuteman, Evergreen, and New Mexico Health Connections, challenged parts of the formula laid out in HHS annual payment and parameter regulations. These lawsuits were filed in the summer of 2016 against the Obama Administration's HHS and CMS. One of the main points of contention was HHS's use of statewide average premiums instead of each plan's premiums when creating its risk adjustment formula. HHS adopted this based on the assumption that the program must be budget neutral.

Evergreen went in to receivership right after it was ordered to pay $24.2 million dollars into the RA fund in August of 2016. If they wouldn't have had to pay the RA funds they would have seen a profit of $2 million for the year. Minuteman saw their lawsuit upheld in early 2018 so no changes were required to the original HHS/CMS guidelines.

New Mexico however, received a somewhat positive outcome. In their case the judge ruled in favor of NMHC on payments being based on plans and not the state's average premium. All other claims in the suit were dismissed and lawsuit was completed at the end of February of 2018.

Which leads us to now. Without clarity the Trump Administration has temporarily suspended all payments and collections of RA until the lawsuit is resolved. Once it is resolved payments and collections will resume. Further, because the Trump Administration issued relevant guidance in the 2018 Notice of Benefit and Payment Parameters this shouldn't happen again in the future.

Trump is not "sabotaging" Obamacare. In fact this is something that could have been avoided and fixed by the prior administration. I'm not sure why they didn't fix it and I haven't seen anyone suggest or explain why Andy Slavitt and Sylvia Burwell lacked a game plan back then.

They could have issued interim rules to circumvent the problem. They could have adjusted the 2017 Notice of Benefit and Payment Parameters that were rushed through in late 2016 to mitigate the problem too.

But they didn't. So now - for at least the next news cycle - we will be stuck hearing about a small but substantial piece of the insurance payment system gone awry. Albeit those complaining are the ones who implemented it but didn't fix it.

Medicare Drug Plan Deductible - How Does It Work?

How do Medicare Part D prescription drug plans work? Why do some have a deductible? Am I required to pay the deductible up front before I can have a copay? Does the copay apply to all drugs? Isn’t a plan without a deductible less expensive?

In 2018 Georgia has 24 different prescription drug plans. Some #PartD plans have a deductible, others do not.

In many cases your drugs may have a lower #copay and lower annual out of pocket cost when you choose a plan with a #deductible. Premiums are usually less as well when compared to plans that do not have a deductible.

Roughly 6% of Medicare beneficiaries will ever enter the #donuthole. Many people can actively monitor their drug plan and avoid the donut hole completely.

Every #drugplan has a #formulary. The formulary let’s you know which drugs are covered by the plan, which are not.

The formulary also determines your copay.

Every Part D plan is approved by Medicare and each one is required to cover roughly 600 different drugs.

You have questions. We have answers.

Additional reading



Monday, July 09, 2018

Words. Fail. Mandate. Lives.

While we've never been fans of the (Evil) Individual Mandate, we've recognized that it's limited in how draconian its enforcement is allowed to be. Worst case scenario, a big check to Uncle Sam (and even that's difficult to actually enforce).

But as terrible as the (Evil) ObamaCare Mandate is, it pales in comparison to the new iteration recently passed by the Rocket Surgeons in the District of Columbia:

"DC Passes Law Requiring People To Buy Health Insurance Or Have Their Property Seized"

So, "nice house you've got there, be a shame if something happened to it because you passed on buying health insurance."

Worse yet, it doesn't appear that there's a carve-out for Direct Primary Care or Health Care Sharing Ministries (as there is in the ACA).

Yikes, indeed.

Darned if you do...

We try not to get too political here at IB, so I want to be careful in how I characterize the subject of this post. First, one needs to know that the Cost Sharing Reduction (CSR) mechanism was designed to help offset the higher claims anticipated as a result of implementing ObamaCare. There's some dispute as to their legality (or, rather, how they were actually paid for). Regardless, carriers counted on them when determining rates, and for "cleaning up" their books at the end of a given plan year.

These funds have now been cut off by the folks in charge (ie President Trump's CMS). Now, whether or not this is a good idea is, of course, debatable. What's not at issue, it seems, is the effect this will have on premiums going forward. As FoIB Michael Bertaut has noted, carriers have been counting on these reimbursements (from the 2017 plan year) in their 2019 rate calculations. Absent these funds, rates are going to go even higher.

On the other hand, FoIB Jeanne Bodine calls them "insurance company bailouts."

Contrariwise, co-blogger Patrick says that they're not bailouts, but promises to carriers.

I think that there's room here for everyone, and that the most accurate description is "bribes."

So, you may ask, what's the difference between a "bailout" and a "bribe?"

Well, a bailout is something that occurs after an event, whereas a bribe is an inducement towards a given behavior or action. And there is zero doubt that insurance companies were big proponents of the idea of ACA (hey, the government's going to make people buy my product? Count me in!) but not so much fans of the promise of guaranteed issue and immediate coverage of pre-existing conditions. The CSR's were a bribe to get (and keep) carriers "on board;" if they go away, what then?

Well, it's not as if there's currently a plethora of carriers available, so look for even more market tightening.

And, since there aren't a lot of variables left for carriers to rein in costs, look for narrower networks and more restrictions on prescription drug coverage.

Oh, and the idea that this some kind of "sabotage" by the Trump administration?

Well, not so fast there. As Christopher Jacobs (CEO of a well-regarded policy consulting firm) notes, this actually lies at the feet of one Andrew Slavitt, also well-known but hardly someone to be admired. Mr Jacobs writes:

"The Trump administration took actions to comply with a federal court order that vacated rules promulgated by the Obama administration—including rules CMS issued when Slavitt ran the agency. If Slavitt wants to denounce the supposed “sabotage” of Obamacare, he need look no further than the nearest mirror."

In other words, Mr Trump was simply following the law.

Not that there's anything wrong with that.