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Never a Dull Moment in Healthcare!

Never A Dull Moment In Healthcare!

Those of us in healthcare know that there is never a dull moment in our world. Below are some short takes on the plentiful issues that have popped up the past week or so.

Obamacare Repeal is Back

After suffering a huge defeat just a few short weeks ago with the Affordable Care Act (ACA), President Donald Trump and House Speaker Paul Ryan say a repeal and replace effort is coming back. While no definitive deal is inked yet to attract enough GOP conservatives to the bill without losing moderates, some say an agreement in principle may be there with a little more red meat for conservatives and perhaps just enough relief to satisfy enough moderates to stay on the bill. Areas of negotiation include restoring essential benefits nationally but allowing states to ask for waivers related to these benefits as well as charging sicker patients more if high-risk pools are set up. Since the setback, we can’t tell you that the votes are there; they may or may not be. But in the end, whether the House passes a bill next week or not, three things are true.

  • First, the bill will be lousy for America. Under the construct, even tweaked, millions and millions of Americans will lose coverage in both Medicaid and in the commercial world.
  • Second, this is a political game that has little to do with health care and more to do with providing enough money to cut taxes later this year.
  • Last, whatever happens now in the House, a true repeal and replace is a long time coming. The Senate has but 52 GOP members and a group of at least five know the House bill is unworkable. They will take their time in crafting a needed but reasonable replacement.

More Plans Pull Out of Exchanges

Don’t take our criticism of the House repeal and replace bill as an endorsement of Obamacare. Not by any stretch of the imagination. It is clearly a flawed framework that year by year is suffering a loss of health plans and viable access. Iowa is yet another example: Both Aetna and Wellmark (a regional Blues plan) said they are leaving the Exchanges in that state. That largely leaves two plans left, and one may leave given the other plans’ decisions. Almost all counties will have no more than one plan next year. The same is being played out in many other states. Very quickly in America, Obamacare will become a program of the haves and have nots. Urban and sophisticated healthcare states will have reasonably vigorous competition and the others will have little or no choice of plans or doctors.

Trump’s Blackmail Fails; Now, Will He Back Off

Here, we are talking about his recent about-face on the cost-sharing subsidies that are the life blood of propping up the Exchanges, at least temporarily. These subsidies defray cost-sharing for those under 250 percent of the federal poverty level and are doled out quarterly to health plans. A judge has found that the subsidies are unlawful as there is no direct appropriation. However, understanding the significance to the Exchanges, both House Speaker Ryan and the administration signaled their support for continuing them for now. Suddenly, the administration has had a change of heart. Trump declared recently he was unsure whether he would actually make the payments and that Democrats better come to the table and negotiate a sensible deal. The blackmail failed. Democrat leaders declared that they would not be held hostage. Health plans that are trying to hang in there and make decisions for 2018 filings (which are due soon) met with the Centers for Medicare and Medicaid Services Administrator (CMS) Seema Verma. Apparently she sat stoically and gave plans no assurance. May is coming and time will tell.

Exchange Regulation Changes May Actually Backfire

The Trump Administration unveiled some regulatory changes meant to stabilize the Exchanges going into 2018. Some fear these changes may actually destabilize things more despite some good intentions. The two main cornerstones of the reforms are:

  • a decreased timeframe to enroll each year (cutting it to just 45 days – shorter than the 7-week Medicare window) as well as tightening of restrictions for enrollment outside the sign up period and
  • slightly more flexibility in benefit design while still being able to be designated for the various actuarial value metal tiers (Platinum, Gold, Silver and Bronze)

The signup reforms were meant to ensure that people do not game the system by waiting until they have an illness or medical event before signing up. The restrictions outside of open enrollment make sense. But, as some note, the 45-day timeframe could be too short and create signup confusion for members. This could lead to healthier people missing the signup period. Health plans actually hate what they see as it would mean fewer sales to those critically needed in the program.

The benefit reform was more understandable. The administration attempted to provide some flexibility within the confines of a somewhat prescriptive framework. So far, the administration has not decided to change the essential benefits mandate, which would provide the biggest changes. For now, the regulation will provide greater variability in cost-sharing, deductibles, etc. At the same time, it likely will lead to confusion on the part of many unfamiliar with the changes, it, too, will not be enough to attract the younger enrollees for whom it was designed.

On the whole, we feel like the changes will do little to fundamentally change plans’ views. Those that would have stayed, will stay. Those destined to exit, will exit.

When Chuck Grassley Talks, People Listen

Senator Chuck Grassley (R-Iowa) is one of the brightest minds in healthcare. The Judiciary Chairman recently sent a letter to Administrator Verma challenging her to get tough with Medicare Advantage plans who are overbilling Medicare. The issue surrounds the lack of documentation regarding risk adjustment scores. A recent Government Accountability Office (GAO) report noted that CMS has recouped a mere fraction of likely overpayments and blamed CMS on many fronts, including excessive administrative costs. The issue is not as cut and dried as one may think. (See our previous blog on this subject.) With Grassley focused on this, it shows that usually plan friendly and supportive Republicans are not afraid to up the ante on their free enterprise brethren – whether it is on increasing compliance, focusing on quality, or ensuring efficiency. “By all accounts, risk score gaming is not going to go away. Therefore, CMS must aggressively use the tools at its disposal to ensure that it is efficiently identifying fraud and subsequently implementing timely and fair remedies,” Grassley wrote to Verma. CMS will have no choice but to expand oversight in this area in the future. It was in the plans anyway.

On a related note, the Justice Department recently joined two whistleblower False Claims Act lawsuits against United Healthcare over allegedly fraudulently inflating risk scores. These whistleblower suits are not uncommon. The suit alleges United Healthcare’s behavior goes back to 2006. United Healthcare denies any wrongdoing. To bolster its defense, United Healthcare is among a number of health plans that is suing CMS (since January 2016) over a May 2014 payment rule about overpayment processes and penalties. The plans allege that CMS overstepped its regulatory authority in requiring plans to return overpayments within 60 days of finding them or face False Claims Act penalties (such as lawsuits and damages). This was one reform undertaken by CMS to mollify critics, such as Grassley.

The beef of the plans is that CMS has significantly watered down the legal standard that usually applies to the Act, which will unduly open the plans up to risk and penalties. Interestingly, a judge recently ruled that the plans have standing because of the new obligations placed on them and the claims deserve judicial scrutiny. Generally, courts give the executive branch a great deal of latitude when it comes to regulatory fiats, but in this case it is possible CMS over-reached. Part of the plans’ defense will be that CMS itself does not have clear guidelines on risk categorization and that it hasn’t even undertaken a thorough evaluation. The root of the overpayment problem is multifaceted:

  • Lack of overall regulatory clarity
  • Poor coding practices and documentation by physicians
  • Poor claims submission practices by physicians
  • Poor encounter submission by providers to plans
  • Poor encounter and claims processing
  • Poor risk adjustment and encounter submissions by plans, which leads to a heavy concentration on supplemental submissions
  • Poor documentation gathering and insufficient audits by plans
  • Plan over-exuberance in creating supplemental risk submissions
  • And yes, perhaps, fraud and abuse

Price Wants Docs to Submit Ideas

In yet another signal that Health and Human Services Secretary Tom Price plans on dismantling some of the quality experiments in the Medicare fee-for-service (FFS) system, Price is asking doctors to submit their ideas for reform. Congress finally passed a successor to the old failed Sustainable Growth Rate (SGR) physician reimbursement system, an arbitrary scheme that never worked and was constantly overridden politically. The new system reimburses doctors in one of two ways:

  1. transaction payments graded by quality measures that could lead to reductions of overall payments or
  2. one of a number of alternative payment models.

If you are in the second category, you won’t receive a potential quality reduction and could receive a bonus.

The change was long overdue but doctors are pressuring Price (a doctor himself) to dismantle any number of the reforms that are meant to encourage quality. They argue the paperwork and investment needed is too burdensome. We don’t buy it.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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