Monday, August 22, 2011

On Packages and Details

Years ago, we discussed a (then-new) effort by Blue Cross of Minnesota to standardize how the costs of various medical procedures would be explained to insureds. We lauded this effort because, for most people, EOB's (Explanation of Benefits) provided little in the way of detailed information about those costs and how insurers made them understandable to "normal" folks.

We also appreciated that this effort was undertaken voluntarily bu Blue Cross, and hoped that it might pressure other carriers to follow suit.

So one might think that we'd also laud the latest stupidity from the still-unconfirmed CMMS Administrator Donald Berwick:

"We are telling insurance companies that they need to be more transparent about the benefits they offer, what they are spending premium dollars on, and justifications for any proposed rate increases"

Right, Donny-boy, because you've been so forthright all along.

The fact is, plain-language rules have been in place for many years, and consumers don't read those policies. So what possible reason is there to increase admin costs on carriers?

But wait, it gets stupider [ed: is that even possible?]:

"This is all grounded in the idea that the more informed the patient is, the better decisions he or she can make."

Um, no.

First, because unlike Minnesota Blue's transparency effort, it's about plan design, not claims adjudication. Your car's owner's manual may be helpful in telling you how to change a headlight bulb, or reset the clock, but it's not going to tell you how much a new transmission costs or what brand of tires to buy.

Second, this is a direct assault on ERISA (aka "self-funded") plans:

"[S]ince most large employers customize the benefit packages they provide to their employees, some health plans could be required to create tens of thousands of different versions of this new document"

So much for that much-touted 3000% premium savings.
blog comments powered by Disqus