Emergency Visits Have Not Gone Down Since the ACA
Emergency visits are increasing despite the Affordable Care Act (ACA), according to a report by the Centers for Disease Control and Prevention. Jay Kaplan, MD, FACEP, president of the American College of Emergency Physicians (ACEP) said, “The reliance on emergency care remains stronger than ever. Just because you have health insurance does not mean you have access to timely medical care. Every shift, I treat patients who couldn’t access a primary care physician and had no choice but to come to the emergency department because their condition worsened dramatically. America has severe primary care physician shortages; many doctors will not accept Medicaid patients because Medicaid pays so inadequately.”
According to a 2015 ACEP poll, three-quarters of emergency doctors said that emergency visits had gone up since the implementation of the ACA. Most said that the availability of urgent care centers, retail clinics, and telephone triage lines have done little to reduce emergency visits.
There is strong evidence that Medicaid patients don’t have timely access to primary care and specialty care. The median wait time for Medicaid providers is two weeks, but over one-quarter have wait times of more than a month. More than half of providers listed by Medicaid managed care plans are not offering appointments to enrollees. This is despite an ACA provision that boosts pay to primary care doctors who treat Medicaid patients. For more information, visit www.acep.org.
One-Third of Doctors Consider Quitting After Passage of the ACA
Thirty-six percent of all doctors, and 45% of private practice doctors say they are more inclined to leave the medical profession because of the Affordable Care Act (ACA), according to a study by CompHealth. Fifty-one percent of doctors surveyed view the ACA unfavorably while 30% view it favorably. Physicians in private practice are most pessimistic, with 61% saying they view the law negatively. Doctors also say the following about practicing medicine after the ACA:
- 47% say the ACA has improved access to healthcare and insurance.
- 44% say the ACA has had a neutral effect on their patients’ quality of healthcare.
- 76% of all doctors, and 86% of private practice doctors say they are not properly compensated by ACA reimbursements.
- 38% say their salaries have decreased.
- 44% spend less time with their patients.
- 68% spend too much time entering data.
- 59% spend too much time doing paperwork.
To cope with challenging circumstances, 40% of doctors are supplementing their income by filling in for other doctors, moonlighting, and consulting. For more information, visit chghealthcare.com.
Medicare Advantage Versus Traditional Medicare
A report by the Kaiser Family Foundation reveals that Medicare HMOs perform better than traditional Medicare in providing preventive services and using resources more conservatively, at least through 2009. Two studies found that Medicare PPOs performed better than traditional Medicare on some metrics (particularly mammography rates). HMOs performed better than PPOs. These studies were conducted before changes made by the Affordable Care Act (ACA) to improve coverage of preventive services under traditional Medicare.
There is some evidence that relatively low cost-sharing (through Medicare HMOs or through Medicare with supplemental coverage), may result in earlier diagnoses of some cancers compared to traditional Medicare alone. Treatment patterns for some cancers may differ between Medicare HMOs and traditional Medicare, but studies do not show that it affects patient outcomes.
Medicare beneficiaries in HMOs are less likely to be hospitalized for a potentially avoidable admission than beneficiaries in traditional Medicare, according to six studies of beneficiaries represented by the Alliance of Community Health Plans (ACHP). Four of these studies rely on data before 2006, and reflect HMO experiences in mature markets. Performance varies substantially among Medicare Advantage plans, even among those of the same plan type. More established HMOs with integrated delivery systems tend to perform better.
On the other hand, beneficiaries rate traditional Medicare higher in quality and access, such as care and plan rating, though one study suggests that the difference may be narrowing for the average beneficiary. Traditional Medicare is much more popular among beneficiaries who are sick. It is not yet possible to assess performance after the implementation of the ACA’s Medicare Advantage payment changes. Except for hospice care, none of the 40 studies comparing Medicare Advantage to traditional Medicare rely on data from 2010 or later. For more information, visit kff.org.
Retiree Private Exchange Strategy Expected to Soar
Health Exchange Resources (HER) predicts a major strategy shift among employers that offer group Medicare Advantage Retiree medical plans. In 2017, employers with a group Medicare Advantage health plan will have to make tough decisions about maintaining offerings to retirees. Employers may see a 10% to 20% increase in costs based on 2017 proposed base reimbursement competitive bid structures from the Centers for Medicare & Medicaid Services (CMS). For many employers this could mean an additional $50 million to $100 million in retiree health care costs. Medicare retiree exchanges will provide viable options.
The unsustainable cost has refocused discussions over retiree health care costs in industries, such as oil and gas, whose revenues support employer sponsored retiree group plans. David Osterndorf, HER’s chief actuary and partner said, “The impact on employers sponsoring group Medicare Advantage plans can be significant. It’s critical to understand the real numbers to avoid and overcome any adverse impact.” For more information, visit healthexchangeresources.com
CMS Proposes Prior Authorization for Home Health Services
The Partnership for Quality Home Healthcare expressed deep concern about a proposal by the Centers for Medicare & Medicaid Services’ (CMS) that would require prior authorization of Medicare home health services. Under the proposal, CMS must approve physician ordered services before care can be initiated. The Partnership says that this would delay access to services, increase costs to Medicare and to taxpayers, and place burdensome requirements on providers. Other healthcare sectors that require prior authorization have documented care delays of up to 10 days.
Keith Myers, chairman of the Partnership said, “Home health patients are often at greatest risk during the transition from hospital to home. For care to be delayed by several days opens up the possibility for a host of adverse events ranging from missed medication, to new infections, to poor management of chronic conditions. We urge CMS to recognize the potential negative patient consequences that will result from a prior authorization requirement and we urge the agency to not proceed with a prior authorization demonstration program for home health.”
Home health leaders also warn that prior authorization would drive up costs to Medicare since patients would be more likely to be sent to more expensive in-patient facilities or experience a hospital readmission while waiting at home alone for their prescribed post-acute care. The proposed demonstration program would also increase the administrative burden on doctors and home health agencies who already provide extensive documentation on patient eligibility for home healthcare services. The proposal would not reduce fraud and abuse in the home health community, according to the Partnership. Bad actors will submit false records to satisfy the need for prior authorization, just as they do for CMS’ other documentation requirements.
In addition to these policy concerns, home health leaders stress that CMS does not have the legal authority to implement this prior authorization demonstration. The Partnership has offered several proposals to address fraud, including targeting aberrant billing and utilization, having sufficient checks on qualifications and background, and identifying geographic hot spots for fraud. For more information, visit homehealth4america.org.
Drug Spending Growth Reaches 8.5% in 2015
Total spending on drugs in the United States reached $310 billion in 2015, up 8.5% from the previous year, according to a report by the IMS Institute for Healthcare Informatics. The surge of new drugs remained strong last year, and demand for new brands was high. Savings were relatively low from branded drugs facing generic competition. Price increases on brands had a limited effect due to higher rebates and price concessions from manufacturers. Specialty drug spending reached $121 billion on a net price basis, up more than 15% from 2014. (Net-price spending does not relate to a patient’s out-of-pocket costs or the amount health plans pay for drugs. It estimates the amount received by pharmaceutical manufacturers so it reflects rebates, off-invoice discounts, and other price concessions that manufacturers make to distributors, health plans, and intermediaries.)
Manufacturers are accepting lower price increases on existing products. At the same time, spending on new brands continued at near-historic levels. Increasingly, healthcare is being delivered by different types of healthcare professionals and from different facilities while patients face higher out-of-pocket costs and access barriers. The study predicts mid-single digit growth for drug spending through 2020, driven by innovative treatments and offset by brands facing generic or biosimilar competition.
Heightened competition among manufacturers, along with more aggressive efforts by health plans and pharmacy benefit managers to limit price growth, resulted in significantly lower price increases than in prior years. The report also reveals the following:
- Spending on specialty drugs has nearly doubled in the past five years, contributing more than two-thirds of drug spending growth from 2010 to 2015. Treatments for hepatitis, autoimmune diseases, and oncology drove increased specialty spending. The year 2015 saw a 21.5% spending increase for specialty drugs.
- Forty-three new active substances were launched in 2015 with a third receiving orphan drug designations from the FDA. An additional 30 brands were launched last year, bringing new combination therapies, alternative dosing, and treatment administration options to patients. The strong momentum of breakthroughs and R&D productivity is reflected in the 2015 cohort of new drugs.
- Total prescriptions dispensed in 2015 reached 4.4 billion, up 1% year over year. Demand was higher in some therapy areas, such as antidepressants and anti-diabetes, each of which increased about 10% in 2015.
- Over the past five years, integrated-delivery networks have expanded their affiliations with healthcare professionals to increase negotiating power with insurers, save money, and drive pay-for-performance initiatives. More than 54% of healthcare professionals are affiliated with integrated-delivery networks. In the past five years, there has been a 115% increase in urgent care centers and pharmacy in-store clinics. The number of prescriptions written by nurse practitioners and physician assistants more than doubled over the past five years.
- While brand price increases are expected to continue in the 10% to 12% range, they will be significantly offset by rebates, discounts, and other price concessions.
- The are very bright prospects for innovative drugs becoming available through 2020. The late-phase pipeline holds 2,320 novel products, with an average 43 to 49 to be launched annually over the next five years.
Biosimilars Would Improve Affordability
Incentives for doctors to prescribe biosimilars could increase utilization and reduce costs, according to a report from Matrix Global Advisors (MGA) and released by the Pharmaceutical Care Management Assn. (PCMA). Each day that providers delay prescribing FDA-approved biosimilars means higher costs and fewer options for patients, said PCMA president and CEO Mark Merritt. Biosimilars can improve the cost-effectiveness of drugs by driving competition, said Alex Brill, CEO of MGA and author of the report. The FDA recently approved Inflectra, the second biosimilar approved in the United States. Inflectra will compete with Remicade to treat Crohn’s disease and rheumatoid arthritis, among other conditions. According to a recent IMS Health report, $182 billion in drug spending expected to be subject to biosimilar competition from 2016 to 2020. For more information, visit PCMA.org.
Inside the Koch Brothers’ Plot to Privatize Veterans’ Health Care
The American Federation of Government Employees charges that some Koch-backed politicians on Capitol Hill are trying to sell out veterans to private, for-profit VA providers. The following is a summary of an editorial by AFGE president David Cox Sr., which appeared on The Daily Kos:
In 2014, the secret wait list scandal rocked the VA. As millions of new veterans returned home from the battlefields of Iraq and Afghanistan, too few caregivers were hired to meet the demand. After months of work by veterans’ groups and our union, Congress finally agreed to fund the VA and fill the care gap. The VA has made slow but steady progress ever since: adding 13,940 additional health care staffers, completing more than 97% of appointments within 30 days, reducing veteran unemployment to its lowest level in seven years, and increasing night and weekend clinical hours for veterans by 5.7%.
Despite the progress in the intervening two years, a well-funded conspiracy of anti-government groups and politicians have plotted a strategy to exploit the wait list issue and privatize the VA for good. The Koch Brothers’ fake veterans’ group, Concerned Veterans for America, and their mouthpieces in Congress launched a brutal smear campaign against the VA, painting it as a hapless bureaucracy that could never be fixed. The reality, of course, could not be further from the truth.
According to a recent Vet Voice Foundation survey of veterans, 64% were opposed to privatizing VA medical centers and services. When asked whether they would like a voucher in place of their coordinated VA care, an overwhelming 80% of respondents said no. This is in addition to staunch opposition to privatization by the eight largest veterans’ organizations in the country.
You’d think with veterans, their service organizations, and VA caregivers agreeing that the VA must stay, we would be working toward making it better, not tearing it down. Unfortunately, big-money insider politics has infected Washington’s effort to improve the VA and turned it into an all-out attempt to eliminate the system that 9 million veterans depend on for their care.
The most imminent threat emerged just last month out of the so-called Commission on Care, a group of political appointees tasked with developing recommendations for improving veterans’ health care. Despite what its gentle name might suggest, this is no independent blue ribbon commission; it is rife with glaring conflicts of interest and undue political influence that make it a better tool for self-enrichment than helping veterans.
Of the 15 Commission appointees, four are high-level private hospital executives that stand to profit from privatization. One is openly on the payroll of the Koch-funded Concerned Veterans for America. Even worse, not a single mainstream Veterans Service Organization like the American Legion or Disabled American Veterans – you know, the veterans who will actually be forced to live with the group’s decisions – have a seat at the table. Plain and simple, the Commission has been rigged against veterans from the start, and the results could be devastating for millions of veterans and their families.
Just last month, pro-privatization members of the Commission met in secret to develop the so-called straw man document, (more on this next week) a proposal that would shutter VA medical centers and instead give veterans a coupon to shop for their care at private, for-profit VA providers. This shocking proposal would divert billions of public dollars to for-profit health insurance companies while forcing veterans returning from overseas to struggle with fractured care from private, for-profit VA providers lacking experience treating the needs of the veteran population.
Commission members who disagree with privatization have been subject to unprecedented bullying by pro-privatization lawmakers like House Veterans Affairs Committee Chairman Jeff Miller, who in a recent letter berated a committee member for an anti-privatization article a colleague wrote for Washington monthly. This blatantly partisan interference and intimidation further diminishes the Commission’s work, and calls the entire process into question.
How can we the people in good faith support this Commission when it is clearly designed to benefit the rich and powerful, and not our veterans? It is the very definition of the fox guarding the hen house, and our veterans stand to lose the most. As the saying goes, if you’re not at the table, you’re on the menu.
Making matters worse, Miller and his Senate ally Marco Rubio are now targeting the very employees who exposed the wait list problem in the first place. Their bills – H.R. 1994 and S. 1082 respectively – would make the entire VA workforce at-will employees who would have no meaningful protection from reprisals for blowing the whistle. The last thing we need is to give bad managers carte blanche authority to fire honest employees who just want to do right by the veterans they serve. President Abraham Lincoln created the Department of Veterans Affairs to fulfill a promise: to care for him who shall have borne the battle, and for his widow, and his orphan. We must not allow a morally bankrupt group politicians and shadowy billionaires to break that promise now. Call your lawmakers at 202-224-3121 and tell them: do not privatize veterans’ health care by selling out veterans to the lowest bidder. It’s time to properly fund and staff the VA.
Actuaries Say ACA Risk Adjustment Program Is Working
The Affordable Care Act’s (ACA) permanent risk adjustment program appears to have worked as intended in its first year, according to the American Academy of Actuaries. The program is designed to mitigate the financial risks of insurers that participate in the ACA health insurance market. The Academy report focuses on the individual market. Health insurers with more costly, higher-risk enrollees generally received payments from insurers with healthier enrollees. This helped reduce the risk of an insurer enrolling a disproportionate share of high-cost enrollees in the ACA market. The permanent risk adjustment program helped spread risk among insurers.
The transitional reinsurance program compensated plans in the individual market when they had enrollees with especially high claims, reinforcing the flow of funds to insurers with high-cost enrollees. The more difficulty an insurer had in covering claims with premiums (as measured by its loss ratio), the more likely it was to get a risk adjustment payment. This pattern is consistent with shifting funds from insurers with low-cost enrollees to insurers with high-cost enrollees.
Insurers with smaller market share experienced more variability in the risk adjustment payments they made or received. Risk adjustment transfers are likely to be higher for insurers with a smaller market share. Smaller insurer enrollee populations are more likely to be skewed toward lower-risk or higher-risk individuals. For more information, visit www.actuary.org.
Carriers Promote Short-Term Care Insurance
Seven leading insurance companies are behind the first national advertising effort to promote short-term care insurance. The National Advisory Center for Short-Term Care is sponsoring the first ad in the July issue of Kiplinger’s Personal Finance magazine. The seven supporting insurers include Aetna Senior Solutions, Bankers Fidelity Life, Bankers Life and Casualty, Equitable Life, Kemper Senior Solutions, Medico, and Standard Life.
The typical short-term care insurance policy provides coverage for one year or less. It covers care in a nursing home, assisted living facility, or long-term health care facility. The typical person buying short-term care insurance is 65 to 74 and has a net worth of less than $500,000. Short term care insurance can be attractive in the following circumstances according to the National Advisory Center for Short Term care::
- You or a spouse were declined for traditional LTC insurance.
- You want a less expensive option than traditional long-term care insurance.
- You are 80 or older.
- You are a single woman. Rates for short-term care policies are not gender-based as they are with traditional long-term care insurance.
- You have a long term care insurance policy and you want to cover the elimination period.
For more information, visit shorttermcareinsurance.org.
CAHU Sacramento Conference
Every spring, CAHU members converge on the Capitol in downtown Sacramento for the annual legislative conference and grassroots lobbying. It will be held May 17 and 18. For more information, visit cahu.org.
How Life Settlements Address Cost of Insurance Increases
Asset Life Settlements, LLC is urging insurance advisors and universal life policyholders to prepare an action plan for policies affected by recent cost-of-insurance increases. Cost-of-insurance increases have made it more challenging to manage in-force life insurance for seniors. Certain situations could compromise the ability to sell the policy in the secondary market. Insurance and financial advisors should monitor each policy’s performance and take steps when cost-of-insurance increases put policies at risk.
Scott Thomas, co-founder of Asset Life Settlements said, “The recent cost-of-insurance increases, which primarily impacted senior consumers 70 and over, came as a surprise to those owning universal life policies and has set a precedent for what could happen. Some increases were substantial enough to jeopardize the policy owner’s ability to continue making premium payments. If policy owners realized that language in their policy left open the door to cost-of-insurance increases, they could have prepared for the financial impact of those increases.”
Many industry professionals say that the low interest rate environment that triggered the recent cost-of-insurance increases will continue for the near future. Recent surveys have shown that most universal life policy owners assumed that their premiums would not increase if they paid their premiums on time. Asset Life Settlements says that policy holders should ask their agent or financial advisor for a policy review to discuss potential maximum cost-of-insurance charges. The policy holder or the agent should confirm with the carrier whether the universal life product is subject to immediate or future cost-of-insurance increases. Such increases usually occur on a policy’s anniversary date.
Policy holders should ask their agent or financial advisor to request an updated in-force illustration showing minimum level premiums and level death benefit to age 100. Policy holders should discuss with their agent whether downsizing the death benefit would make premiums more affordable. The agent or policy holder should get an evaluation of the current market value of any existing life insurance policy. For more information, visit assetlifesettlements.com.
Life Insurance Activity up 4.9% in March
Underwritten life insurance applications were up 4.9% in March year-over-year, according to the MIB Life Index. Life insurance application activity was up 5.4% in first quarter of 2016 compared to the first quarter of 2015. Since the third quarter of 2014, the MIB Life Index has been progressively stronger in each successive quarter. March’s application activity was down 1.2% from that of February, tempered by February’s robust results.
Life insurance application activity increased across all age groups; it is the fourth consecutive quarter in which younger age life insurance activity (ages birth to 44) has led all others. In March, application activity ages birth to 44 was up 6.5%, ages 45 to 59 was up 3.1%, and ages 60+ was up 2.9%, year-over-year. At the end of first quarter of 2016, individually underwritten life insurance applications were up 6.9% for ages birth to 44, up 3.5% for ages 45 to 59, and up 3.6% for ages 60 and over compared to the same quarter of last year. For more information, visit mibgroup.com.
How DOL’s Final Rule Could Harm Fixed Indexed Annuity Sales
New Dept. of Labor (DOL) regulations will significantly expand fiduciary obligations. The new rules will impose a high legal standard on almost anyone offering a financial product or advice to an ERISA plan participant or IRA holder, according to the Indexed Annuity Leadership Council (IALC). Jim Poolman, executive director of the IALC said, “We are disappointed by the decision of the DOL to treat fixed indexed annuities (FIAs) differently than every other fixed annuity product. This rule discriminates among similar insurance products without any rational basis. It will harm millions of Americans who need the lifetime guaranteed income that these annuities offer, and it will impose significant financial burdens on thousands of small business persons who offer sound financial advice to working Americans. Despite countless meetings, three comment letters, and public testimony before DOL, the final rule mischaracterizes FIAs and imposes rules that make no sense. We are still digesting the final rule as it spans more than 1,000 pages. In the days and weeks ahead, the IALC and its member companies will continue its analysis and explore all options to address the rule’s deficiencies.” For more information, visit IALC.org.
Common Census has teamed up with four national third party administrators to help employers complete Affordable Care Act reporting. This includes preparing forms 1094 and 1095. For more information, visit commoncensus.com.
Onsite Disability Management
Unum now offers onsite disability management to offer employees one-to-one engagement with a disability consultant before and after disability leave. Whether it’s a nurse, physical therapist, occupational therapist or ergonomist, the on site professional will help employees stay at work or transition back to work after a leave. The leave professionals will coach employees on ways to avoid a disabling event. They will also meet with employees before a planned leave to set expectations, provide early guidance on return to work, and offer support and encouragement during the leave. For more information, visit unum.com.