PRIVATE

PAYOR

OUTLOOK KELLI BACK, ATTORNEY AND APMA CONSULTANT

Insurance Coverage by

Source (2015)

Employer Group – 49%

Non-group (individual and association) – 7%

Medicaid – 20% (includes dual eligibles)

Medicare – 14% (excludes dual eligibles)

Other Public – 2% (Includes military and veterans)

Uninsured – 9%

Marketplace Stability

Congressional Budget Office determined that the

individual market is currently stable due to

subsidies.

According to ASPE individual buying through exchange has an average of 30 plan choices.

CBO determined that the individual market would

also be stable under AHCA because of shifts in

insured and rearranged tax credits.

Employer group market remains stable.

April 4, 2017 ACA

Rulemaking

Shortens the annual open enrollment period for 2018 to align with Medicare and the private market. The next open enrollment period will start on November 1, 2017, and run through December 15, 2017, encouraging individuals to

enroll in coverage prior to the beginning of the year.

Requires individuals to submit supporting documentation for special enrollment periods and ensures that only those who are eligible are able to enroll.

Allows issuers to require individuals to pay back past due

premiums before enrolling into a plan with the same issuer. This is intended to address gaming and encourage individuals to maintain continuous coverage.

April 4, 2017 ACA

Rulemaking

Allows issuers additional actuarial value flexibility to

develop more choices with lower premium options for

consumers, and to continue offering existing plans. The

current nominal actuarial values are 90%, 80%, 70%, and

60% for platinum, gold, silver, and bronze, respectively, and

plans are currently allowed to deviate from these nominal

values by a de minimis range of ±2%. The rule would allow

plans to deviate below the nominal AV by 4% or above the

nominal AV by 2%.

Eliminates duplicative review of network adequacy by the

federal government. The rule returns oversight of network

adequacy to states that are best positioned to evaluate

network adequacy.

Private Market Trends

Continuing trend to provider consolidation.

Big health systems accept risk; determine how to

incentivize pay providers.

Physician Payment by

Private Health Plans

Continuing to adopt value-based payment

mechanisms.

Seeing it increasingly funded by MLR savings and

paid out based on quality. Primary Care remains

the focus, with certain exceptions for inpatient

facilities.

One study shows that in 2011 46% of payment

arrangements had a value based feature – expected to increase to 75% by 2017.

Medicare Advantage plans are contracting with “ACOs.”

Other Marketplace

Innovations

Movement around rewards and incentives for

insured individuals.

In some case requires significant health care

data.

Medicare Advantage

Issues

Provider Payment

Coverage Obligations

Appeals

Demonstrations

SNPs?

Medicare Advantage

Market Snapshot In 2016, 31% of beneficiaries enrolled in MA plans.

2,034 Medicare Advantage plans are available nationwide for individual enrollment in 2017 (relatively stable since 2011). HMOs represent 2/3s of these plans.

238 plans exited the market in 2016 – mainly low enrollment plans.

271 plans were offered for the first time in 2017.

Half of the 271 new Medicare Advantage plans in 2017 are offered by UnitedHealthcare, Aetna, and BlueCross BlueShield plans.

UnitedHealthcare alone accounts for about one-quarter of all new Medicare Advantage plans.

Aetna and Humana together account for another one-quarter of new plans.

New organizations offered plans in nine states: California, Illinois, Iowa, Georgia, Florida, Mississippi, North Dakota, Pennsylvania, and South Carolina.

Medicare Advantage

Market Snapshot

In 2016, 7 organizations and their affiliates

accounted for almost three-quarters of all

enrollment: UnitedHealthcare, Humana, Blue

Cross and Blue Shield (BCBS) affiliated companies (including Anthem BCBS plans), Kaiser

Permanente, Aetna, Cigna, and Wellcare.

These companies and affiliates account for 64

percent of the plans being offered in 2017.

United Healthcare and Humana are the biggest

player by far. (39% of total MA enrollment in 2016)

Medicare Advantage

CMS to offer plans “more flexibility.” Issued

request for information in most recent Call Letter.

Key enforcement and scrutiny area has been

network adequacy.

CMS has specifically asked whether there should

be different network adequacy standards for

SNPs.

Medicare Advantage

Provider Payment

Contracted Providers: Paid in accordance with their contract. CMS will generally not get involved in coverage disputes between contracted providers and MAOs. MAOs are not obligated to recognize the same modifiers or otherwise pay in the same manner as FFS if their contract allows it.

Such disputes, however, may be resolved in state courts.

Contracted Providers: Must be paid the same amounts they would have received under FFS Medicare.

Certain exceptions for some deemed providers.

Medicare Advantage

Provider Payment

Contracting Provider Payment is only regulated

by Physician Incentive Payment (PIP) rules:

Physicians/Physician groups may not be put at

“substantial financial risk” for services they do not

personally provide (referral services). Exception for

patient panel size >25,000.

Example: A podiatrist could receive full capitation

(100% risk) for services the podiatrist or podiatrist

group furnishes.

Example 2: A PCP could NOT be eligible for a

bonus payment over 33 percent of potential

payments minus the bonus if it is based on utilization

of hospitals and specialists.

Medicare Advantage

Coverage rules MA plans must cover all services covered under Medicare

FFS plus any supplemental benefits they file in their bid.

MA plans must generally follow the LCD for the place in which the service was provided and all NCDs.

Exception: MA plans that include multiple local coverage policy areas in their service area may adopt a uniform coverage policy, under which the MAO applies to plan enrollees in all areas uniformly the coverage policy that is the most beneficial to MA enrollees.

Uniform Local coverage policies must be approved by CMS and information on the selected local coverage policy must be made readily available, including through the Internet, to enrollees and health care providers.

Medicare Advantage

Coverage rules

Plans can put into place utilization requirements

not used under Medicare FFS, such as an

obligation to show medical necessity or prior

authorization requirements.

What does “covered” mean?

Does not mean provider must be paid as under FFS.

Does not necessarily mean provider must be paid

separately for the service.

Means that the beneficiary may obtain the service

for the cost sharing amount set forth in the Evidence

of Coverage.

Medicare Advantage

appeals rules

Contracted providers: Use plan’s internal appeals process. Plans free to develop process. Not regulated. Processes vary greatly.

Non-contracted providers: Must sign a waiver of beneficiary liability in order to appeal.

Ist level appeal is to plan. However, if plan affirms its decision in whole or part, it is forwarded to an independent CMS contractor (Maximus) without further action by the provider.

2nd level appeal to Administrative Law Judge available (must meet amount in controversy threshold).

3rd level appeal to MAC

Medicare Advantage

appeals rules

Non-contract Provider Payment Disputes: Where

the issue is solely whether the provider received

the amount of payment due under Medicare FFS

due to:

Miscalculation

Downcoding

Never includes medical necessity issues.

Plan internal appeals process would apply.

Special Needs Plans

Opportunities?

I-SNP, C-SNP

Model of Care

More small, locally based plans (exception, Care

Improvement Plus, owned by United).

Sometimes provider-based (particularly I-SNPs).

New MA Demonstration - Value

Based Insurance Design

Starts January 1, 2017 and runs 5 years

7 test states available for the demo in 2017 were:

Arizona, Indiana, Iowa, Massachusetts, Oregon,

Pennsylvania, and Tennessee.

11 plans in 4 states (CT, PA, IN, MA) applied and

were accepted for 2017

For 2018, plans in Alabama, Michigan and Texas

can participate

2017 plans

Indiana University Health Plans

Highmark Choice Company Pittsburgh, PA

Tufts Associated HMO Watertown, MA

Aetna Health Inc. Hartford, CT

Geisinger Health Plan Danville, PA

UPMC Health Network, Inc. Pittsburgh, PA

Keystone Health Plan East, Inc. Philadelphia, PA

Fallon Community Health Plan Worcester, MA

Healthassurance Hartford, CT

BCBS of Massachusetts HMO Blue

Value Based Insurance

Design

Creates an exception to the uniformity of benefits rule.

Allows for varied plan benefit design for enrollees with the following conditions diabetes, COPD, CHF, Past Stroke, hypertension, coronary artery disease, or mood disorders

Changes to benefit design made may include reduced cost-sharing and/or offering additional services to targeted enrollees.

Reduced Cost Sharing for High-Value Services; Reduced Cost Sharing for High-Value Providers; Reduced Cost Sharing for Enrollees Participating in Disease Management or Related Programs; Coverage of Additional Supplemental Benefits

Non-discrimination:

An Update

Fox-Quamme, Hess, Redfield, Chapman, and Clark, v.

Health Net Health Plan Of Oregon, Inc., and American

Specialty Health Group, Inc.

July 7, 2015 – the first lawsuit citing Section 2706 of

the ACA was filed.

Oregon Association of Naturopathic Physicians

(OANP) participated in filing a class action suit in

federal court against the Health Net Health Plan of

Oregon and its contracted benefits provider

American Specialty Health (ASH), alleging “unlawful

and discriminatory practices.”

As initially filed Plaintiffs were 2 naturopathic

doctors and 3 patients. OANP was not a named party.

Fox-Quamme, Hess, Redfield, Chapman, and

Clark, v. Health Net Health Plan Of Oregon, Inc.,

and American Specialty Health Group, Inc.

The discriminatory Health Net/ASH practices cited in the lawsuit include:

an annual limit on the number of reimbursable visits to naturopathic physician;

the requirement of a Medical Necessity Review form, that other providers are not required to provide;

a $1,500 maximum reimbursable cap for the use of naturopathic medical services;

a limitation on certain types of medical care performed by naturopathic physicians that are within their scope of practice including, but not limited to, the delivery of preventative services; and,

reimbursing naturopathic doctors at up to 80% less than other providers for the same service rather than varying reimbursement rates based on objective quality or performance measures.

Fox-Quamme, Hess, Redfield, Chapman, and

Clark, v. Health Net Health Plan Of Oregon, Inc.,

and American Specialty Health Group, Inc.

THREE CLAIMS FOR RELIEF –

(1) Defendants actions resulted in reduced benefits to Plaintiffs and members of the Class, including denied services and reduced access to care. Patient plaintiffs and the class are entitled to recover benefits owed, to enforce their rights under the Plans, and to clarify rights to future benefits. They are also entitled to attorney fees.

(2) Defendants retained funds that should have been reimbursed to NDs, and, in some cases, to the patient plaintiffs and Class. Defendants have also profited from reduced access to medical care caused by their discriminatory practices. Patient plaintiffs and the class are entitled to equitable relief, including an injunction prohibiting Defendant from discriminating against NDs with respect to participation under the Plans or coverage of services provided under the Plans, and attorney fees.

Fox-Quamme, Hess, Redfield, Chapman, and

Clark, v. Health Net Health Plan Of Oregon, Inc.,

and American Specialty Health Group, Inc.

(3) Plaintiffs seek a declaration by this Court that

Defendants cannot discriminate against NDs with

respect to participation under the Plans or

coverage of services provided under the Plans.

Fox-Quamme, Hess, Redfield, Chapman, and

Clark, v. Health Net Health Plan Of Oregon, Inc., and American Specialty Health Group, Inc.

The class action sought several remedies, including:

(1) reimbursement to individuals who have been

denied benefits under their Health Net health

insurance plans;

(2) repayment of profits retained by Health Net as a

result of its discriminatory practices;

(3) enforcement of non-discriminatory practices in

the future; and, a court order for Health Net and ASH

that clarifies which of their practices are unlawfully

discriminatory.

Fox-Quamme, Hess, Redfield, Chapman, and

Clark, v. Health Net Health Plan Of Oregon, Inc.,

and American Specialty Health Group, Inc.

HealthNet filed a motion to dismiss

Motion was partially granted. Judge dismissed the

first complaint without prejudice and directed

OANP to file an amended complaint.

OANP filed an amended complaint.

Judge dismissed the third claim stating that only

patients harmed (not providers) can seek redress

under ERISA.

In April, case was dismissed. Merits were never

considered. Patient plaintiff could not show enough harm to have standing.

Fox-Quamme, Hess, Redfield, Chapman, and

Clark, v. Health Net Health Plan Of Oregon, Inc.,

and American Specialty Health Group, Inc.

To mitigate damages, Plaintiff agreed not to

appeal the dismissal.

Lessons learned:

Case must be brought under ERISA

Physicians don’t have standing under ERISA

Finding the right patients is the hurdle. Must be able

to show damages.

No way to address pay disparity through patients.

Dominion Pathology

Labs v. Anthem Dominion Pathology Labs., P.C. v. Anthem Health Plans of Va., Inc.

Plaintiff is three-physician practice that provides biopsy diagnostic services. Anthem unilaterally cut payment for services by 60%. Physicians negotiated with Anthem and entered an agreement, but also sued.

They bring the section 2706 anti-discrimination claims as a breach of contract claim. Both parties and the Court have agreed there is no private right of action under section 2706.

It was removed from Federal Court to State Court with a determination that there was no significant question of Federal law.

Court recently denied a motion to dismiss, but upheld Anthem’s right to terminate its contract with the group.

Questions?