health care – Page 2 – ScriptSourcing

Reference Pricing Can Reduce Medical Outlays, Costs

In an effort to coax health plan participants to use price-shopping behavior when deciding on where to have a procedure, more insurers are starting to roll out a system known as “reference pricing.”

With reference pricing, the health insurer imposes a limit on the amount it will pay for a particular procedure – a limit that is reasonable and allows access to care for patients. The price is usually a median or average price in the local market.

When a health plan participant selects a provider that charges less than the cap, they will receive the standard coverage with little or no cost-sharing.

But, if they decide to use a provider that charges more than the cap, the participant will have to pay the entire difference out of pocket. These excess payments do not count towards the patient’s deductible or the annual out-of-pocket maximum.

Use of reference-based pricing rose from 11% to 13% among large employers in 2015, according to a study by Mercer Benefits.

Proponents of reference pricing say that it can reduce health care spending because it encourages people to shop for better deals and, eventually, encourages hospitals to lower their prices.

Organizations that have implemented reference pricing report lower outlays for procedures.

CalPERS, the pension fund for California state employees, in 2011 began reference pricing and asked its preferred provider organization, Anthem Blue Cross, to research the average costs for hip and knee replacements among hospitals and develop a program that ensures sufficient coverage by those hospitals that meet a certain cost threshold.

The program set a maximum of $30,000 for these procedures.

The number of Anthem-CalPERS enrollees who chose a designated high-value hospital for their knee or hip replacement surgery increased from 50% between 2008 and 2010 to 64% in the first nine months of 2012, compared with little to no change among Anthem policyholders not enrolled in CalPERS.

Also, the average price for such procedures fell from more than $42,000 before the initiative to $27,148 in the first nine months of 2012.

The changes resulted in savings of about $5.5 million during the first two years of the reference pricing initiative, and the average cost to CalPERS for the procedures fell by 26%.

CalPERS says that after it implemented reference pricing, some of the hospitals that charged more than the payment limit significantly reduced their prices for the procedure.

These price reductions have increased; the number of California hospitals charging prices below the CalPERS $30,000 reference limit rose from 46 in 2011 to 72 in 2015.

Limits of reference pricing

To be clear, reference pricing cannot be applied to all procedures.

It should only be used for procedures or products that health plan enrollees can shop for, and when they have time to compare choices based on price and quality. This can include:

Scheduled procedures like the aforementioned knee replacements
Ambulatory surgical procedures
Lab tests
Imaging
Pharmaceuticals

What it should not be used for:

Emergency procedures
Unique components of care that the patient can’t select independently, like a lab test during a visit to a doctor
Complex medical conditions

Trends Shaping Health Insurance and Health Care in 2020

As a new decade begins, the health insurance industry is on the cusp of making a leap towards improved, higher-tech management of health plan participants.

A recent paper by Capgemini, an insurance technology and consulting firm, predicts the following trends that will be taking shape in the health insurance industry and how they may affect businesses that are paying for their employees’ coverage.

1. Realigned relationships — Insurers are trying to shift risk between themselves and pharmaceutical companies in an effort to reduce drug outlays. The report says insurers are also working more closely with health care providers for early intervention in medical issues that may be facing participants. Addressing health issues early can reduce long-run treatment costs.

2. Fluid regulations — As we’ve seen, just because the Affordable Care Act became the law of the land, the regulations governing health care and health insurance have continued streaming out of Washington. If the last two years are any guide, this will continue to be the case. Also, the constitutionality of the ACA is now being litigated once again after an appeals court upheld a lower court’s ruling that the individual mandate is unconstitutional.

3. Increasing transparency — More stringent regulations, along with President Trump’s recent executive order to improve price and quality transparency, are forcing the health care industry and insurers to become more transparent in their pricing.

One of the biggest focuses is on the drug industry and the role of pharmacy benefit managers, the largest of which have been criticized for being opaque in their pricing, discounts and how they handle drug company rebates.

Also, insurers are increasingly providing detailed information regarding services covered under their health plans, claims processing and payments. Additionally, some insurers are helping enrollees to make more informed decisions before they use a health care service by providing digital tools to help them reduce out-of-pocket expenses.

4. Predictive analytics — Health insurers are using predictive analytics for risk profiling and early intervention for enrollees with health issues. Predictive analytics provide insurers with insightful assessments of potentially high-risk customers, in order to mitigate losses.

With advancements in technologies such as big data and connected devices, insurers now have access to vast amounts of customer data, which can be used to remind people it’s time for their check-ups, medications and other necessary medical services.

Insurers are using predictive analytics to identify and monitor high-risk individuals to intervene early and prevent further complications. This in turn can help reduce claims.

Telemedicine Taking Off, Reducing Health Costs

One of the fastest growing parts of the health care system, and which touches significantly on group health plans, is telemedicine.

From 2016 to 2017, insurance claims for services rendered via telehealth ― as a percentage of all medical claim lines ― grew 53% nationally, faster than any other avenue of care, according to “FH Health Indicators,” a white paper published by the nonprofit FAIR Health.

Telehealth uses technology to provide remote care via video conferencing and other means and is proving to be more and more effective, especially for time-pressed individuals or people who live in rural areas where patients often have to travel great distances for care.

Elderly patients especially find it useful, since it eliminates the need for transportation.

But as telehealth gains traction, the focus is shifting away from the novelty of connected devices and new technology and more toward providing patients with top-notch care ― and giving providers, physicians and nurses alike the power to deliver it effectively. As it evolves, it is also a promising new trend in terms of reducing health care delivery costs.

Telehealth can reduce the cost of care by eliminating the physical barriers that prevent patients from managing their health. As more patients take advantage of digital services like remote patient monitoring, automatic appointment reminders, and remote physician consulting using live video and audio, patients can use these services to reduce the cost of care and improve their chances of early detection.

And that can reduce your overall group health plan costs, as well as out-of-pocket costs for your employees.

Tech firms are coming up with more efficient ways for patients to communicate with their doctors that save time and money, and reduce liability for doctors as well. For example, more and more health care practitioners are adopting an online patient portal as a direct link between the patient and the doctor.

Doctors, patients embrace online portals

The portal can easily be password-protected for each patient and streamline routine interactions from appointment-setting to refilling prescriptions ― and everything in between.

For example, when it’s time to get a prescription refilled, the patient simply makes a request to his or her doctor, via the patient portal or even via a cell phone or tablet app that can be proprietary to the practice. The doctor checks the dosage and approves the request in a few clicks, and in seconds the information is sent directly to a pharmacy so the patient can pick up the prescription.

The patient doesn’t have to get the doctor on the phone or bug the staff for a moment with the doctor, and the doctor doesn’t have to do additional paperwork or get on the phone with the pharmacy to call in the prescription after already having spoken with the patient on a separate call. The result is tremendous time savings ― and ultimately, cost savings for both the doctor and patient.

Online portals also facilitate communication between doctors and patients between appointments. If a patient has a question or clarification that does not warrant an additional office visit, the doctor or staff can quickly respond in an instant, without playing phone tag, and without having to route calls to busy doctors who can’t always be on the phone.

Physicians can also leverage these portal technologies to send lab results and images directly to the patient using a secured and encrypted link, and to make clinical summaries easily available online. When the doctor adds new information to the file, such as a lab report, the portal system can be programmed to automatically send an e-mail alert to prompt the patient to log onto the portal.

For all the technology though, we still have a way to go in implementing it. According to a recent study in the Journal of General Internal Medicine, 57% of respondents said they want to use their doctor’s website to review their medical records, but only 7% of those polled reported having made use of that technology to access their own information online.

A study from the Annals of Internal Medicine found that 77% to 87% of individuals who used their physician’s portal to open at least one note, and who completed a post-intervention survey, said that the process helped them be more in control of their health care.

DOJ Tells Court to Nullify ACA; What’s Next?

After a period of relative stability, the future of the Affordable Care Act has once again been thrown into uncertainty.

In a surprise move, the Department of Justice announced that it would not further pursue an appeal of a ruling by U.S. District Court Judge Reed O’Connor, and instead asked the 5th U.S. Circuit Court of Appeals to affirm the decision he made in December 2018.

O’Connor had ruled that Congress eliminating the penalty for not complying with the law’s individual mandate had in fact made the entire law invalid.

But, even though the DOJ won’t be pursuing defense of the law and challenging the ruling on appeal, a number of states’ attorneys general have stepped up to fight the ruling.

What this means for the future of the employer mandate is unclear, as the court process still has a long way to go. The ruling could be overturned on appeal and invariably whatever the 5^th Circuit decides, the case will likely be appealed to the U.S. Supreme Court.

Already there has been fallout in the private health insurance market since the individual mandate penalty was eliminated, but the employer mandate, which requires that organizations with 50 or more full-time or full-time-equivalent workers offer health coverage to their employees, remains intact.

As the case winds on, it will be some time before anything changes. The 5th Circuit has not yet scheduled arguments. The DOJ has asked for a hearing date for July 8, and Democratic states’ attorneys general agreed.

Despite the DOJ’s announcement, the law stands and applicable large employers must continue complying with its requirements.

Analysis

The move was surprising because in the past President Trump had signaled that he wanted to keep parts of the ACA, particularly the barring of insurers from denying coverage based on pre-existing conditions. If the entire law is scrapped, so will that facet – as well as other popular provisions, like allowing adult children to stay on their parents’ policy until the age of 26.

Trump said his administration has a plan for something much better to replace the ACA.

Democrats have introduced some legislation to try to stabilize markets and improve on some ACA shortfalls. Their legislation aims to cut premiums for individuals buying on exchanges by expanding premium tax credits. Another bill would reaffirm the pre-existing condition protections, and restore enrollment outreach resources, which have been cut back under the Trump administration.

But with a divided Congress, the likelihood of anything reaching Trump’s desk are slim to none.

Meanwhile, the success of the ACA has been spotty. In some parts of the country, usually in areas with high population density, competition among plans ensures lower prices for people shopping on exchanges. But in smaller regions, cost increases are rampant.

A new analysis by the Urban Institute, a liberal-leaning think-tank, finds that more than half (271) of the country’s 498 rating regions have only one or two insurers participating in the ACA marketplace. Those regions are disproportionately in sparsely populated areas.

Regions with little competition tend to have much higher premiums. In a region with only one insurer, the median benchmark plan for a 40-year-old nonsmoker is $592 a month. That compares to $376 for the same consumer in a region with at least five plans.

Surprise Medical Bills and ‘Balance Billing’ in Crosshairs

When your medical care provider charges more than your insurance company is willing to reimburse, you may get a bill asking you to pay the difference – a practice called “balance billing.” The Trump administration is moving to put a stop to the practice.

In a recent White House round table on limiting health care expenditures, President Trump vowed to end balance billing, citing a report from the Kaiser Family Foundation that showed that four out of 10 Americans had received a surprise medical bill in the past year.

The practice is already banned for participating Medicare and Medicaid providers, though non-participating Medicare providers who haven’t completely opted out of the program can still impose a surcharge of up to 15%.

How does balance billing happen?

Balance billing often results in a surprise medical bill, received after the services are rendered. It’s especially common when:

A patient doesn’t ask about actual medical costs at the time of service.
A patient accidentally receives services from an out-of-network provider.
A patient receives a service not covered under their plan.

In theory, it should be easy to check whether your provider is in your network before seeking medical services. In practice though, things aren’t so easy. For example, even if your hospital is in-network, you can get a surprise invoice via balance billing under circumstances like these:

They bring in an out-of-network radiologist;
They use an out-of-network laboratory;
They hire an out-of-network anesthesiologist; or
They bring in an out-of-network consultant.

This is true even though someone else picked the provider, not you. You may not even have been conscious at the time.

Some states have already moved to restrict the practice – but state laws so far have generally only protected people on state-regulated plans. Those on self-insured employer plans, for example, don’t receive much protection under these state laws.

But federal officials are pushing for more transparency: The Department of Health and Human Services has already required hospitals to publicly post their list prices of all their services online, effective Jan. 1 this year.

There is also some legislation pending in Congress. Under the No More Surprise Medical Bills Act of 2018 (S. 3592) sponsored by Maggie Hassan (D-NH), providers can only charge a patient an in-network amount, unless the patient has been properly notified about the charge and has consented to it.

That bill was referred to committee last year, though its future in the new Congress is uncertain.

There’s also yet unnamed draft legislation from a bipartisan group of senators that would protect patients from out-of-network billing, set payment standards, and prevent balance billing.

The draft was written by Bill Cassidy, M.D. (R-LA), Michael Bennet (D-CO), Chuck Grassley (R-IA), Tom Carper (D-DE), Todd Young (R-IN) and Claire McCaskill (D-MO).