From the Did You Know category today: the state of Indiana is challenging a key provision of the ACA having to do with the medical loss ratio for insurers. That’s the amount by which insurance premiums are set a certain degree of cost implementation for overhead. The ACA requires the insurer to spend 80 percent on healthcare delivery, or else pay a fine. Indiana is pursuing a federal waiver from this proviso. Healthcare consumer advocacy weighs in.
Indiana’s application is based on state politicians’ ideological opposition to health reform, not the realities of the state’s health care market … As the MLR regulations make clear, there must be a credible threat to the stability of the individual marketplace in order to grant a waiver. Indiana has demonstrated no such threat. We urge [HHS] to reject Indiana’s application.
Indiana is the only state in the country to request that consumer high deductible health plans be exempted from MLR provisions unconditionally. HHS will ultimately decide on the matter. | LINK
HHS is scaling back its July 1 date it set to enforce new policies concerning insurance claims denials and reviews. According to the agency, states need more time to “adhere to requirements” — much to the frustration of patient advocacy groups and to the benefit of Insurance. Policyholders had 4 months in which to prepare appeals arguments previously under yet-to-be-instituted reform rules. Now it’s just 2 months.
Essentially, the Obama administration’s new rules give beneficiaries less time to prepare an appeal, less information about the reason for the denial and limitations on which denials can be appealed. Patients can still appeal if their coverage is canceled by an insurer, and decisions by external review panels are still in effect. External reviews will now start on January 1 of next year. The external review process is key to healthcare consumerism under the reform law, as patients have never before been required to complain to an independent review panel since individual states never entered into this regulatory aspect of reform until now.
Now that insurers have some breathing room until the initiation of this process and consumers have a narrower window of appeals action, the only question is who this move truly benefits in the long run. Expect to hear more concern from advocacy groups on matters of not only the delay of policy enaction, but also the apparent loss of protections as a result of a srinkwrapped appeals process. | PDF link to HHS document concerning new rules
The SCOTUS announced yesterday that it will not fast track a Virginia appeals court ruling on the unconstitutionality of the reform law regarding its mandate on individual coverage. One year later, another provision of the ACA — the earmark of government funds (approx. $5B) to set up high-risk pools — continues to enroll healthcare consumers, but not exactly at a breakneck pace.
Previous to President Obama’s signing of the reform bill into law, those with high-risk conditions were flat-out rejected for coverage and had to search for alternative means to pay for care (Medicaid, OOP expenses). With the law’s provision in place, those who are able to qualify for such pools are having a much easier go of things, but are running into roadblocks — many of them political.
In (mainly red) states where governors may not support the reform law on constitutional grounds, the adoption rate is much lower among potential policyholders. In many liberal strongholds, however, PR surrounding the availability of pools is benefiting heavily from support of those (mainly blue) states’ chief executives and positive word of mouth. Since high risk pools are run by private insurers, premiums can also be a barrier to entry for many potential healthcare consumers, as well.
In spite of more aggressive awareness campaigns, development of more coverage options, and lowering of drug copays, enrollment in these pools still remains awfully low. As the Republicans begin to make this issue one of rejection by the American people on the subject of reform, Obama should give serious thought to on how best to move this provision forward. Twenty-fourteen[1] is still quite a ways away. | LINK
A healthcare informatics company issues a report today that I really do not find surprising. The trends of Pharma of late are much fewer fast-tracked medications in the pipeline, decreased NDAs for many novel and like-classed (so-called “me-too” drugs) medications, and — are you ready for this? — much greater healthcare consumer spending on generics, which, according to the report, now make up almost 80 percent of the pharma marketplace.
It would be too easy to blame this on the economy. At the root of this and other findings detailed in the report are forces more complex in the healthcare economy than just the principles of supply and demand. After all, while there are fewer patient visits and greater demand by providers and health systems for payments by third parties, you can bet that Pharma still manages to turn a profit. Just take a look at the volume of sales by therapeutic areas: anti-cancer drugs continue to lead the way.
The top five therapy classes were: oncologics, with $22.3 billion in 2010 spending; respiratory agents, at $19.3 billion; lipid regulators, at $18.7 billion; antidiabetes drugs, at $16.9 billion; and antipsychotics, at $16.1 billion. Growth in spending among these classes ranged from 0.9 percent for lipid regulators to 12.5 percent for antidiabetes medications.
Although consumers, third party payers, hospitals, and providers all appear to be embracing quality provisions as a way to control costs, it is somewhat less clear what this pharmacologic austerity will ultimately mean for the management of chronic disease and how that will impact the cost of healthcare over the next 10 years. | LINK [PDF] to IMS report
The Obama administration is delaying [PDF] the implementation of certain rules under the new reform law that will enable protections for patients-consumers who wish to appeal claim denials or coverage reductions made by insurance companies. Originally, federal officials were supposed to start enforcement of rules which appear to benefit insurance companies, at least in the short term.
Requirements that Insurance provide increased information outflow via translation to other languages for the benefit of non-English speaking consumers and reductions in the amount of time insurance companies must review denials in “urgent” cases are chief among the rules being delayed under reform.
Patient advocacy groups are scrambling to ensure these rules eventually see the light of day, while insurance companies look for more reasons to balk at administrative requirements by the federal government they see as carrying an increased cost to implement — citing issues [PDF] as mundane, yet labyrinthine, as diagnostic codes and patient surveys as administrative and logistical barriers too high to overcome in the timeframe required under ACA rollout.
Stalling tactic by Insurance to forestall patient protections before they’re even out of the gate? Or earnest re-evaluation of internal policies that requires more time to sort out cost concerns that insurance companies say they need in order to benefit consumers under reform?
The one year anniversary of the ACA is giving many time to reflect on its passage and what it really means for the future of healthcare delivery in the foreseeable future. One thing’s for certain — the controversy surrounding it on all sides will not be going away any time soon. Whereas the public is portrayed in the media as being, at worst, “evenly divided”[1] on the issue (just like every other manufactured boilerplate lately — take your pick), many supporters are saying that the reform law’s original form and intent will eventually get the full support of the American public.
Detractors, not to be outdone, are more emboldened than ever to make this issue a Campaign ’12 one — and a very potent issue, at that. Although the road to the ACA’s passage was characterized by cogent and passionate debate on most levels, the labels applied by opponents — both Republican and Democratic — seemed to take center stage, almost screaming out to any fence-sitters to give up on lobbying for it. In the end, however, the bill survived threats of “death panels”, Tea Party protests, and GOP-stoked fears that ironically warned of the insolvency of Medicare should the measure become law.
The controversy surrounding the reform law is not over by a long shot. Even as healthcare consumers, states, insurance companies, pharma companies, and the federal government hunker down to to accept their roles in the wake of the law, its current incarnation will only be preserved if sound implementation by 2014 overcomes the political rhetoric on the left and right. If the most salient effects of the law — increasing access via exchanges, eradication of pre-existing condition denials, closure of the Medicare Part D doughnut hole, and eliminating coverage and payment inequities in Medicare Advantage plans — remain intact by mid-decade, perhaps the most beneficial result will be that healthcare consumer will receive high-quality, cost effective healthcare delivery without giving the means to this end even a fleeting second thought.
What exactly is an accountable care organization? Interestingly, the term is as much a catch-all for reform as it is a strict rubric for quantifying certain efforts of reform. The potency of ACOs lie mostly in the controversy that surrounds their implementation with many organizations fearing bureaucratic power grabs at the hands of a mighty few. Hopefully Don Berwick will be able to shed some light on their necessary function with respect to reform.
ACOs are the subject of great debate, and many in the health policy world are eagerly following Centers for Medicare & Medicaid Services Administrator Don Berwick’s every move, waiting for the moment he’ll announce the rules defining what an ACO actually is. … Berwick said in a speech Tuesday that the pending rules on ACOs will be out very soon, and he said that all the agencies — HHS, CMS, the Department of Justice and the Federal Trade Commission — are working hard to coordinate [...]
The CMS chief probably knows that his comments on the subject will not quell the issues surrounding ACOs, but will only add to the overall debate surrounding them. Although ACOs do have a place in reform, what many organizations chose to do with his guidelines only mean better efforts at reform in a general sense. Foundations for change have to occur and start somewhere. Berwick’s definition and classification of this reform tool is as good a place as any. | LINK
The ongoing saga that is the threat of insurance premium hikes in California. Essentially all of the major plans, with the exception of BS of Ca., have agreed to delay implementation of increases that were supposed to have taken place in March — citing concerns echoed by the state’s insurance commissioner. As for Blue Shield,
The company is moving ahead with rate increases for the third time since October. Some of its 194,000 individual policyholders were notified recently that they would receive all three at once. Blue Shield spokesman Tom Epstein replied that an independent actuarial review of its rates requested by the company is on track to be completed before March 1.
Posturing on the part of the insurance companies, or forestalling the inevitable in a state already besieged by significant numbers of unemployed, uninsured, and sky high budgetary deficits? | LINK
RELATED: California Once Again under HHS Scrutiny for Excessive Insurance Premium Increases
Originating from Saint Paul, Minnesota, [doctorpundit.com] is a weblog about the policy of healthcare and where it intersects with politics and public opinion; it is edited by Michael Douglas, MD, MBA. Welcome, and please consider my take on what is Healthcare 2.0, complemented by a few of my thoughts on my personal avocations and guilty pleasures: music, prose, and writing. Follow Doctor Pundit via RSS above.
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DOCTOR PUNDIT @ ONE YEAR | An occasional DP series from 2010 highlighting healthcare policy trends over the period from 2009-2010 in a compare/contrast format.
