When Dave Terry started his career in healthcare three decades ago, he noticed something odd and disturbing. The fee-for-service model meant doctors were paid for quantity, not for quality or cost effectiveness. Since then he’s been working to do something about it: for the first twenty years at American Practice Management, then Partners Healthcare and Harborside Healthcare. He made progress, but also learned the limitations of acting against entrenched interests.
For the last decade he’s gotten even more serious, co-founding Remedy Partners in the wake of the Affordable Care Act and then Archway Health, where he is CEO. Archway helps physicians jump into the meaningful risk-based payment models that are finally on offer from the Feds and private carriers.
I compared Dave’s quest to the Thirty Years’ War, but reminded him that there was a Hundred Years’ War, too, so he better gird himself.
I received a couple of ominous looking letters from Boston Children’s hospital, letting me know that my claim has “been suspended” by my insurance carrier, Blue Cross Blue Shield of Massachusetts.
Unlike a couple months ago, when Blue Cross accidentally cancelled my family’s entire policy (oops!) while trying to remove an adult dependent at my request, this time it was due to a “coordination of benefits” issue.
Here’s the situation. Another dependent of mine is a college student in a different state. Our Blue Cross HMO doesn’t work out of state, so we buy an additional insurance plan from the college. (Also one more policy for varsity athletic participation, but that’s another story!)
When this dependent had services at Boston Children’s, we listed the Massachusetts plan as primary. But at least according to the BCBS MA rep I spoke with today, the out-of-state plan should be primary because my dependent is the subscriber, unlike on our family plan where they are listed as a dependent. So even though the out-of-state plan is likely to deny the Massachusetts claim as out-of-network, we need that denial first before submitting to BCBS MA. Make sense?
Oh, and to make things a little more complex, the rep said I need to ask the other plan if they follow the “standard coordination of benefits rules.” Apparently some student plans don’t.
Medicare eligible Americans have borne the brunt of coronavirus. Some of the immediate impact on Medicare Advantage plans is obvious. They are covering telehealth and paying for acute hospital stays.
But there are longer term implications, too. Their risk adjustment scores are thrown off by the lack of visits. Certain supplemental benefits (think gym membership!) no longer sound so healthy, while others (meal delivery) become super valuable.
The 21st Century Cures Act (signed by President Obama in 2016) set out to make healthcare more patient-centric and increase patient access to medical records held by health plans. Implementation is occurring this year and health insurers need to improve interoperability in order to meet the requirements.
In this podcast interview, Karen Kobelski, who runs Wolters Kluwer Health’s Clinical Surveillance, Compliance & Data Solutions business unit explains what plans are doing and how her organization is helping.
Here are some of the topics we covered:
What are some of the key challenges health plans face in gathering and managing data?
There has been talk of interoperability for many years —but seemingly little progress. What does interoperability mean in the context of health plans?
The 21st Century Cures Act addressed interoperability. What was the aim? How are the rules being implemented?
COVID-19 is affecting everything in healthcare and in society more broadly. How does the interoperability imperative for payers change when viewed through the lens of the pandemic?
What role does Wolters Kluwer Health play in interoperability for health plans? Can you give me an example of a client success story?
It’s no surprise why auto insurers like State Farm and Geico are sending rebates to customers this spring and summer. No one’s driving, so accident claims are way down and insurers are paying out very little. No one expects drivers to make up for lost time by crashing their cars more often once they return to the roads. That means a dollar saved now on claims is a dollar saved forever. Insurance companies and state insurance commissioners realize this, too and that’s why the rebates are coming.
But you might be surprised that health insurers, starting with UnitedHealth are beginning to do the same thing. United is offering a 5 to 20 percent credit on June billing statements, which is the same order of magnitude as the auto insurers.
So the questions are:
Aren’t insurers spending a fortune on the surge of COVID-19 patients as they overwhelm the medical system?
What about the coming surge of deferred elective surgeries and the ‘train wrecks’ with acute or chronic conditions that have stayed away from the emergency room and doctor’s office? Won’t insurers need the money to pay for those when they return?
And the answers?
Insurers are spending a lot on some COVID-19 patients. Big bills are rolling in for hospitalized patients, especially those that land in the ICU and are on ventilators for weeks. But even though a lot of people are sick, it’s only the hospitalized patients that incur expenses. With no costly outpatient or drug treatments, overall COVID-19 costs are not so high. Also, many of these patients are older (Medicare) or poorer (Medicaid), not in United’s commercial markets, where the rebates are focused.
Other than COVID-19, the medical system is eerily quiet. Essentially the only other bills are for telemedicine, some cancer treatments, and medications for chronic illness.
We do hear about a coming ‘second wave’ of non-COVID-19 patients later this year as hospitals reschedule elective surgeries, people who have been avoiding the emergency room come back in worse shape, and chronic care patients incur more intensive treatments after declining.
These assumptions are driven by a combination of what seems like common sense, clinician desires to help patients, and wishful thinking by hospital financial chiefs.
But UnitedHealth knows something that others don’t: utilization and costs are not going to rise as fast as people assume. So insurers are getting out ahead of it before regulators, the ACA medical loss ratio requirements, and public opinion force their hand.
They will be in for a rude surprise, however, because many people will continue to stay away. Instead patients will use telemedicine, pursue less aggressive treatments, or just wait for time to heal what ails them. For years, healthcare experts and insurers have known that hospital care is over-utilized and sometimes dangerous. Now COVID-19 has done what co-pays, deductibles and hospital safety reports never could –keep patients away.
It’s no surprise that elective procedures and routine visits have plummeted. After all, hospitals canceled them. Surprisingly, the use of emergency rooms in Boston for strokes, heart attacks and appendicitis has also dropped by half during the emergency. Many emergency patients will return, but those with common issues like back pain and rashes will think twice or three times before coming in. Patients who are due for colonoscopies or mammograms will put them off even longer than usual.