April 18 – by Leila Morris
Subscribe to Insurance Insider News
IN CALIFORNIA
• UnitedHealthcare Agrees to Cover Behavioral Therapy for Autism
• Life Agent Is Charged With Grand Theft
NEW PRODUCTS
• Free Educational Webinars on Health Insurance
• Fixed Immediate Annuity
• Prescription Adherence Tool
• National Vision Product
• Variable Annuity
• Defined Benefit Termination Program and Guide
• Bilingual Mobile Website
• Book Bashes ObamaCare
PRESCRIPTION DRUGS
• Healthcare Costs Soar When Patients Don’t Take Their Meds
HEALTHCARE
• Murky Healthcare Pricing Affects High Deductible Plans
• New Cancer Care Payment Model Recommended
FINANCIAL PLANNING
• Contrary to Predictions, Boomers Are Retiring
DISABLITY INSURANCE
• On-Site Consultants Enhance Disability Reporting
UnitedHealthcare Agrees to Cover Behavioral Therapy for Autism
Insurance Commissioner Dave Jones reached an agreement with UnitedHealthcare to cover behavioral therapy for autism as a medical benefit. This new agreement follows three settlements reached earlier this year with Blue Shield, Health Net and Cigna to provide behavioral health treatments, including Applied Behavior Analysis, a well-recognized and effective treatment for autism. Anthem Blue Cross of California has been providing the coverage, pursuant to the direction of the Department of Insurance, since November 2009.
UnitedHealthcare also agreed to do the following:
• Maintain an adequate provider network.
• Provide services for the length of time and at the number of hours per week specified by the insured’s provider.
• Create a dedicated customer service unit with staff who are trained to handle inquiries about applied behavioral analysis.
• Provide information about policy benefits for medically necessary behavioral health treatment, screening or diagnosis.
• Verify coverage or eligibility and provide prior authorization, if required.
Before the settlement, UnitedHealthcare rejected claims for applied behavioral analysis, saying that the treatment was experimental and investigational. This series of agreements ensures that the company complies with the state’s Mental Health Parity Act (MHP), which requires coverage for medically necessary behavioral therapies. Reinforcing the requirement of the MHP, the Legislature last year passed SB 946 (Steinberg).
Life Agent Is Charged with Grand Theft
Lori Charles, 41, of Culver City was sentenced on one felony count for violating Penal Code Section 487 (a), Grand Theft. From April 2008 through April 2009, Charles created fictional names and submitted 377 fraudulent insurance applications to a life insurer. The insurer issued Charles over $62,000 in advanced commissions before discovering that something was amiss. The insurer filed a complaint with CDI after noting that Charles submitted an unusually large number of policies in which the policyholders had not submitted premium payments.
Charles entered a plea of no contest in Los Angeles County Superior Court. She was sentenced to 90-days of community service and three years of formal probation. She was also ordered to repay restitution in the amount of $62,652. Charles’ license to sell insurance expired on June 30, 2011.
Free Educational Webinars on Health Insurance
Flexible Benefit Service Corp. launched an educational program on health insurance and benefits administration as well as reimbursement solutions. It is geared toward health insurance producers, human resource professionals, and business professionals. The series of free webinars and seminars will be offered through the “FlexUNIVERSITY” platform, with some courses offering Continuing Education Units (CEUs) from the Illinois Department of Insurance or credits from the Human Resources Certification Institute. For more information, visit www.flexiblebenefit.com or call 866-472-0882.
Fixed Immediate Annuity
Nationwide Financial introduced an enhanced version of its
Income Promise Select fixed immediate annuity product.
Features include the following:
• Lump sum cash refunds for beneficiaries of clients who do not outlive their principal investment.
• Liquidity options that allow clients to make lump sum withdrawals in the event of emergency or the need for extra cash.
• Highly competitive payout rates.
• Cost of living adjustment (COLA) option, which now offers up to 5%.
• A new, easy-to-use quote and illustration tool to help advisors demonstrate the benefits and features of Income Promise Select.
For more information, visit www.nationwide.com.
Prescription Adherence Tool
Express Scripts launched ScreenRx, a solution in the fight against the nation’s costliest health condition: medication non-adherence. The tool identifies patients at highest risk for not following their doctors’ orders. Once identified, patients receive personalized interventions to help them stay on their therapy. ScreenRx considers more than 400 known factors about the patient, the physician, the disease and the prescribed therapy to identify who is most likely to stop taking their medication. The models are up to 98% accurate in predicting non-adherence one year in advance – nearly nine times more accurate than what patients self-report.
National Vision Product
MetLife introduced a vision PPO to employers in all 50 States with 10 or more eligible employees (subject to regulatory approval in certain states). Employers can choose from a wide range of plan designs including choice of service frequency, exam co-pay, a materials co-pay, and a frame/contact lens allowance. For more information, visit www.metlife.com.
Variable Annuity
Lincoln introduced its LVIP Protected Asset Allocation series of funds for its Lincoln ChoicePlus Assurance and American Legacy variable annuity products. These products are designed to reduce volatility, protect account values, and maximize income during retirement. The fund’s portfolio managers continually review and adjust each fund’s asset allocation mix capture upside potential, while minimizing loss in down markets. For more information, visit www.LincolnFinancial.com.
Defined Benefit Termination Program and Guide
The Principal Financial Group is offering a white paper to help financial professionals and their clients manage and close down defined benefit plans in a timely, cost-efficient manner. To get the white paper, “Best Practices for Executing a Termination Strategy; Winding Down Your Hard-Frozen Defined Benefit Plan,” visit http://www.principal.com/financialpros/insights/summaries/db-plan-termination-part-two.htm.
Bilingual Mobile Website
UnitedHealthcare’s Latino Health Solutions launched a bilingual mobile website that provides health and wellness information tailored to Hispanics’ cultural and language needs. The mobile website, which can be accessed by entering m.uhclatino.com on a smart phone browser, offers extensive, culturally relevant health and wellness information, tools and resources in English and Spanish.
Book Bashes ObamaCare
A new book outlines the case for ratifying a new 28th Amendment to the Constitution. The clause is being used to justify the individual mandate in ObamaCare. The book, by Douglas J. Lising, comes with the catchy title of “Remember Roscoe Filburn Amending the Constitution: The Only Sure Way to Limit the Federal Government.” Free electronic copies are available at www.RembemberRF.com and the book can be purchased at Amazon.com.
Healthcare Costs Soar When Patients Don’t Take Their Meds
For many therapy classes, less than 50% of patients take their medication as prescribed. Non-adherent patients seem to be in denial with 89% claiming that they are taking their medication as prescribed, according to the Express Scripts 2011 Drug Trend Report.
Not surprisingly, 69% of non-adherence is caused by forgetfulness and procrastination, 16% is due to the cost of the medication, and 15% stems from clinical questions or concerns the patient has about the medication or the disease.
As a result of non-adherence, the United States wastes $317.4 billion a year on unnecessary medical costs-such as emergency room visits, hospitalizations, and extra tests-to treat health complications that could have been avoided. Eliminating non-adherence would cover the cost of providing healthcare for more than 44.8 million uninsured Americans.
The report also reveals that U.S. spending on prescription drugs increased 2.7% in 2011, the lowest annual drug trend Express Scripts has ever recorded in its 18 years of measuring the statistic. The growth trend for traditional medications fell to 0.1% while the specialty-drug trend continued its rapid growth with a 17.1% increase. Also in 2011, there was a 7% growth trend in diabetes, which now accounts for the country’s largest segment of drug spending.
The top three specialty classes of drugs for inflammatory conditions, multiple sclerosis, and cancer represent 57.6% of total specialty spending. Hepatitis C was the specialty therapy class with the highest cost increase in 2011. The introduction of two new medications contributed to a near doubling of drug spending.
The average member copayment continues its annual decline, now down to $12.02 per prescription. The average copay was $12.10 in 2010 and $13.46 in 2006. For more information, visit http://Express-Scripts.com/DrugTrend.
Murky Healthcare Pricing Affects High Deductible Plans
The Los Angeles Times Reports how difficult it is for consumers to get healthcare pricing information. To see what consumers were up against, the Times contacted 10 California hospitals and asked for the cost of a routine gallbladder surgery for someone with a high-deductible insurance policy.
Seven of the hospitals offered at least partial estimates, but the quoted prices ranged widely from $1,200 an hour for the operating room to a $8,687 facility fee. None included the cost of the doctors, although California Pacific Medical Center in San Francisco did say that the total cost for hospital services, including a room, drugs and other supplies, could be $37,217.
Hospitals must publish their average charges for the most common procedures on a state website (http://www.oshpd.ca.gov/Chargemaster.) But very few consumers are aware of this resource. Relatively few hospitals list prices on their own websites, where people are more likely to be looking for pricing information.
One hospital, Desert Regional Medical Center, didn’t return calls. Contacted later, spokesman Richard Ramhoff apologized and said Desert Regional strives to make sure everyone with a question about rates gets an answer. Another hospital said it would take 10 business days to get an estimate and another required detailed insurance information before discussing prices.
Huntington Memorial Hospital in Pasadena allows people to get an instant price quote for several common procedures including an estimate of the patient’s share after entering their deductible and coinsurance. But even those numbers exclude the thousands of dollars that physicians, anesthesiologists, and other specialists tack on for most surgeries.
A 2009 Rand study revealed that only 28% of the state’s hospitals responded to a request for an estimate from a fictional uninsured patient and less than 3% offered detailed price quotes including hospital and physician fees.
People tend to turn first to medical providers when hunting for prices. In a recent California HealthCare Foundation survey of 1,528 consumers, 26% said they had looked for information on the cost of a medical procedure in advance. Thirty-nine percent contacted a healthcare provider, 30% looked online, and 8% turned to their insurance company. Policymakers and economists have said, for years, that one way to help slow the rising cost of healthcare is for consumers to have more of their own money at stake.
A report issued earlier this year by the market research division of Thomson Reuters estimated that $36 billion could be saved annually if the 108 million Americans with employer coverage did some comparison shopping on more than 300 common medical procedures.
New Cancer Care Payment Model Recommended
In an article published in the April 12 edition of Health Affairs, Lee N. Newcomer, M.D., senior vice president of oncology services at UnitedHealthcare, explores why the cancer care payment system has not kept pace with the revolution in cancer treatment and chemotherapy regimens and calls on the health care community to consider new approaches.
The article notes that cancer therapy has made significant advances since the 1970s while the system for paying oncologists has not kept pace. “It is time for us to reconsider the ‘buy and bill’ reimbursement approach prevalent, and embrace a system that looks more holistically at patient care and rewards quality, not quantity, This is particularly important as the nation looks for new ways to address ever increasing health care costs,” Dr. Newcomer said.
The buy and bill treatment reimbursement approach provides incentives for medical oncologists to use expensive medications when less costly alternatives that deliver similar results are available, according to the report. As more expensive drugs became available, drug profits became a greater share of oncologists’ income.
In most cases, the medical oncologist purchases chemotherapy drugs at wholesale prices from manufacturers and administers them to the patient in the office. To get reimbursement, the oncologist bills the patient’s health insurance plan or payer for the retail price of the drugs, plus a charge for administering the drugs. The report concludes that not only is this fee-for-service arrangement unnecessarily costly, it does nothing to assess how much value society derives from high-priced drugs.
Dr. Newcomer’s article considers two new payment strategies being tested. The first, known as the clinical pathways approach, requires oncologists to treat clinical conditions with predefined chemotherapy regimens that are typically selected by a representative body of physicians. When several regimens are considered clinically equivalent, the least expensive one is selected. The treating oncologist can choose an alternative if a patient has a medical condition that makes the selected treatment inadvisable. Oncologists are rewarded for compliance with the clinical pathway through higher fee schedules, bonus programs, or other forms of incentives.
The second payment model, known as a bundled payment or an episode payment, reimburses participating medical oncologists upfront for an entire cancer treatment program, rather than using the fee-for-service approach that rewards volume regardless of health outcomes. The payment is based on the expected cost of a standard treatment regimen for the condition, as predetermined by the doctor. The oncologist is paid the same fee regardless of the drugs administered to the patient – in effect, separating the oncologist’s income from drug sales while preserving the ability to maintain a regular visit schedule with the patient. Patient visits are still reimbursed, and chemotherapy drugs are reimbursed at the manufacturer’s cost. The Centers for Medicare & Medicaid Services (CMS) plans to launch a bundled payment pilot program in 2014.
UnitedHealthcare launched its own episode payment pilot program in 2010 with five medical oncology groups around the country focused on determining best treatment practices and improving health outcomes. “Paying physicians for a total treatment cycle promotes better care and eliminates the incentive to prescribe costly drugs that may not be the most effective treatment option. A doctor’s income needs to be independent of drug selection. This is better for doctors, better for patients and better for the entire health care system,” Dr. Newcomer said.
Available from: http://www.cancer.org/Cancer/news/News/annualreport-u.s-cancer-death-rates-decline-but-disparities-remain
Contrary to Predictions, Boomers Are Retiring
The popular belief is that Baby Boomers will continue to work well past the traditional retirement age of 65. But those born in 1946 are retiring in droves, according to a MetLife Study.
More are homeowners than in 2008; the value of their homes decreased by only about 5.2% on average; the majority feels they’re in good health; and 83% have grandchildren.
Fifty-nine percent of the first Boomers to turn 65 are at least partially retired; 45% are completely retired; and 14% are retired, but working part-time. Thirty-seven percent of those who are still working plan to retire in the next year. On average, they plan to retire by the time they’re 68.
Sixty-three percent are already collecting Social Security benefits, and on average began doing so at the age of 63, defying the conventional wisdom that people would wait to receive benefits until a later age in order to receive a higher payout. Among those in the survey, just over 60% are confident that the Social Security system will be able to provide adequate benefits for their lifetime.
Forty-three percent are optimistic about the future. Of the 19% who are pessimistic, 49% fault the government and 21% blame the economy. On average, the 65-year-olds say they won’t consider themselves to be old until they’re 79, a year older than reported in 2007.
Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute said, “Many of the Boomers weathered the recession well and have been able to stop working. Half of all Boomers feel confident that they are on track or have already hit their retirement goals…Overall, it’s a pretty confident group of Americans.” The survey also includes these findings:
• The average retirement age for the 1946 Boomers is 59.7 for men and 57.2 for women.
• 24% have a living parent.
• 84% are parents; 83% are grandparents, up from 77% in 2008.
• Of those not retired, 61% plan to retire at the same age as they planned one year ago.
• 31% of 65-year-old Boomers think they were at their sharpest mentally in their 40s; only 20% say they’re at their sharpest.
• Home ownership increased significantly among the studied cohort since 2008, from 85% to 93%.
• 71% are married or in a domestic partnership; 12% are divorced or separated; 10% are widowed and 7% are single.
For more information, visit www.MatureMarketInstitute.com.
On-Site Consultants Enhance Disability Reporting
Using an on-site consultant is an effective way for employers to integrate early disability reporting and disability duration guidelines, according to a white paper from Standard Insurance Company.
The white paper asserts that an on-site consultant improves health and productivity outcomes by maximizing Early disability reporting and the use of Disability duration guidelines. To download the white paper or to learn more about The Standard’s Workplace Possibilities program, visit workplacepossibilities.com.
