Healthcare, Insurance

How Will Expanding Catastrophic Health Plans Affect Providers?

Originally published on Healthcare Dive.

President Donald Trump’s recent executive order to expand catastrophic health insurance plans would offer a low-cost alternative to people in the Affordable Care Act (ACA) exchanges. However, there are serious questions about what they would mean for consumers, providers and hospitals.

The expansion of catastrophic plans would likely result in less utilization of providers and could increase costs as patients put off care until their medical issues are more serious, and therefore more costly. But it could also push providers to improve their patient engagement and embrace the increasing level of consumerism in healthcare, experts say.

It’s a mixed bag for payers as well. These plans could upset the balance of risk pools, but insurers can benefit from offering more options to beneficiaries.

Bret Schroeder, healthcare expert at PA Consulting Group, told Healthcare Dive there is market demand for less-costly plans. Expanding catastrophic plans could help patients who can’t afford more comprehensive plans. The downside is consumers will pay more out-of-pocket costs if they need care.

“If you’re unemployed and seeing skyrocketing premiums, this is an attempt to get care at lower costs. On the other hand, there’s a slippery slope in terms of the financial impact, which can be significant,” Schroeder said.

What are catastrophic plans?

Catastrophic plans are meant as a low-cost safety net from financial ruin. Members in those plans pay little for premiums, but also have the highest deductibles allowed by the ACA. How high? This year, the deductible was $7,150 for an individual plan and next year that increases to $7,350 per person and $14,700 for a family policy.

These plans cover you if you have a serious health issue that surpasses your deductible, but you’re on the hook for out-of-pocket costs until you reach that deductible.

Unlike his executive order to stop cost-sharing reduction (CSR) payments to insurers, Trump’s order including catastrophic plans won’t cause any changes soon. Instead, his action directed the Departments of the Treasury, Labor and Health and Human Services to “consider expanding coverage through low-cost short-term limited duration insurance,” also known as catastrophic insurance. That executive order also trumpeted association health plans.

The departments would need to partake a process of proposing rules and getting public input, which could take years. So, it’s going to be a while before catastrophic health plan expansion happens. Catastrophic health insurance is already part of the ACA exchanges, but it’s not open to everyone. The only people eligible for the short-term plan are those under 30 or with a hardship exemption or affordability exemption. Trump’s order would open up the-short-term plans to more people, possibly everyone.

Currently, the short-term plans hold a small portion of the ACA exchanges market. Out of the 12.2 million people with exchange plans altogether at the beginning of the year, only about 110,000 people were enrolled in ACA catastrophic plans.

People currently enrolled in catastrophic plans are covered for the same essential health benefits as those in the other ACA plans. However, in Trump’s executive order, he suggested catastrophic plans could be exempt from ACA provisions, which could lower costs of the plans, but also offer fewer benefits.

Trump’s proposal also looks to increase the length of the short-term plans. Now, the plans are meant strictly as a stop-gap measure to provide a low-cost option before the person enrolls in a “metal” plan in the exchanges or an employer-based plan. The ACA only allows for three-month catastrophic plans. However, Trump is looking to making them a more permanent option, with people being able to stay on the plans for a year.

What could this mean for providers and hospitals?

Rita Numerof, co-founder and president of Numerof & Associates, told Healthcare Dive studies on high-deductible health plans (HDHP), such as catastrophic health plans, show they reduce healthcare costs, at least in the short-term, but that’s not always positive.

HDHP members often delay care because those plans require the consumer to shoulder more of the cost. Delaying care can lead to long-term health problems for the patients — and less utilization for providers.

“Based on this evidence, we should expect an increase in catastrophic health plan enrollment to result in decreased utilization and lower short-term healthcare costs,” Numerof said. She added that not getting appropriate health services and not adhering to medication can cost more in the long run and lead to more severe health issues over time.

Having more patients pay a larger percentage of their healthcare bills also likely means more uncompensated care and bad debt for providers and hospitals. Stenglein said health systems are already seeing patients paying more out-of-pocket. A recent Kaiser Family Foundation study found that the average deductible for people in employer-based health insurance increased from $303 in 2006 to $1,505 in 2017.

Having people pick up a larger portion of healthcare bills also complicates the billing cycle. Hospitals and providers need to track down payments from patients rather than dealing directly with payers. That’s harder on health systems and more time intensive.

Expanding catastrophic plans may cause issues for providers, but reimbursements to hospitals and providers likely won’t see a change. Numerof said healthcare companies have already seen downward pressure on reimbursements and she doesn’t see that ending, but catastrophic plans won’t quicken that.

What does this mean for payers?

Beyond helping people between jobs, Trump views catastrophic plans as a solution to those who live in counties with only one insurer offering ACA exchange plans, people with limited provider networks and those who missed open enrollment. Nearly half of counties will only have one ACA exchange payer in 2018.

Numerof said the executive order looks to promote competition within the health insurance market and offer more choices for consumers. Numerof said the order is a step in the right direction regarding healthcare consumerism.

There are questions as to whether catastrophic plans could help insure more Americans. Gallup reported recently that the percentage of uninsured Americans increased for the first time since 2014 and is now at 12.3%. Numerof said it’s difficult to know whether expanding short-term plans might improve those numbers. “Ultimately, if the goal is to ensure everyone has access to healthcare in this county, we must first focus on bringing down the overall cost of healthcare,” she said.

Chris Stenglein, CEO of Provider Web Capital, which works on both the practice and patient side of financing, told Healthcare Dive that catastrophic plans could help people who are currently uninsured. “If you don’t have insurance today and you have a high-deductible plan, it’s better than nothing,” he said.

For payers, there is a worry that expanding catastrophic plans may result in healthy people abandoning other types of plans. This could create an unbalanced risk pool in the other plans, which will lead to higher costs for the remaining members.

However, UnitedHealthcare, for one, is speaking positively about catastrophic health plans. During a recent third-quarter earnings call, UnitedHealth officials said they are interested in both types of plans in Trump’s executive order (short-term and association plans).

What can providers and hospitals do?

More HDHPs and catastrophic plans could spark further healthcare consumerism. Numerof said more patients will demand data from providers so they can make better healthcare choices. That information could include costs and quality data for facilities, physicians and treatment options.

Consumers already have difficulty finding information about cost, quality and outcomes. That needs to change, she said.

“Consumers that are responsible for a greater share of the healthcare dollar will also expect a more convenient healthcare experience — from scheduling initial appointments and the intake process to the discussion and scheduling of follow-up treatment,” she said. She added that patients will likely prefer getting care at lower-cost settings, such as ambulatory surgery centers, retail clinics and even within their own homes. That means fewer dollars for hospitals.

Healthcare consumerism is already forcing hospitals and health systems to rethink their business models to remain viable, Numerof said.

“(Healthcare delivery executives) need to place less emphasis on site-level reimbursement and more emphasis on finding new and innovative ways to increase market share. One way to do this is by shifting elements of care delivery away from high-end, expensive settings to more convenient and affordable options for consumers,” she said.

Stenglein said greater consumerism is an opportunity for providers to engage patients. One way to accomplish this is to offer multiple payment options, including extended billing options that give patients a longer time to pay for services, he said.

Stenglein suggests caregivers remain focused on providing healthcare and delegate financial tasks to administrators, front-end staff or outsource to another company. What’s important, he said, is for providers to innovate and practice medicine and let others handle the financial aspect.

Stenglein offered these solutions for providers:

  • Implement more affordable tech-based health solutions like text messaging services or appointment scheduling apps
  • Provide counseling with onsite billing staff to make bills easier to pay and understand
  • Supply patients with estimation tools from practice management & EHR systems
  • Consider practice financing options to bridge any revenue gaps from patients
  • Offer flexible patient financing options — including longer terms — to provide more manageable solutions for families by offsetting costs

Despite the potentially negative impacts to providers and hospitals, Numerof said catastrophic plans are an opportunity for hospitals and providers to compete for business and help patients make better healthcare decisions.

Numerof said providers that will benefit from more catastrophic plans include those that:

Offer patients alternative products and services

  • Demonstrate and communicate economic and clinical value through the use of costs and outcomes data
  • Manage variation in cost and quality across the continuum of care
  • Operate efficiently
  • Show transparency about cost and quality of services

“This is an opportunity for those organizations that want to move to total cost of care and are focused on caring for patients in a more comprehensive way to compete for patients,” said Numerof.


Trump Eyes Executive Order to Cripple Individual Mandate

Originally published on Healthcare Dive.

President Donald Trump’s administration has reportedly prepared an executive order to end the Affordable Care Act’s (ACA) individual mandate. Trump may direct his departments to not enforce the mandate and could allow for more hardship exemptions that let people avoid fines for not having coverage.

Trump is reportedly not following through until he sees whether an individual mandate repeal winds up in major tax legislation. Republicans are trying to pass a tax bill by the end of the year, but they need to find ways to fund the $1.4 trillion tax cut over 10 years. One way is by repealing the individual mandate, which could save $416 billion over a decade.


House Speaker Paul Ryan (R-Wis.) said the individual mandate repeal isn’t part of the current tax bill, but leaders could add it to the legislation.

The Congressional Budget Office predicted earlier this year that about 15 million Americans would lose coverage over 10 years and premiums would increase 20% for individual plans without the individual mandate.

Scrapping the individual mandate would result in fewer people seeking health insurance and fewer government subsidies to help people buy coverage.

Repealing or seriously weakening the mandate would also result in healthier people leaving the insurance markets. Healthier members help offset the sickest members. Without that offset, the health insurance markets will become unbalanced, which would likely result in higher premiums and out-of-pocket costs for those who maintain coverage. Ending the individual mandate would also cause more payers to flee the ACA exchanges.

Increasingly frustrated by the Republican-led Congress not passing ACA repeal legislation this year, the president has taken other ways to chip away at the ACA law. One of his first executive orders in January requested the HHS “exercise all authority and discretion” to delay ACA provisions that impact members and states financially.

That order led to the CMS’ recent proposed rule that would allow states to bypass the ACA’s essential health benefits (EHBs) and let them decide on their own EHBs. It would also remove regulations that require payers in the ACA exchanges to pay a certain amount of premium dollars on claims. Right now, the ACA requires payers in the exchanges to uphold at least an 80% medical loss ratio. In the proposed rule, states would also have more influence over deciding what’s considered a qualifying health plan.

Trump additionally signed an executive order to allow small businesses and groups of people to come together to buy insurance as an association health plan. That order also expands short-term catastrophic plans, which offer barebones insurance coverage with high deductibles. Currently, only young people and those who meet hardship requirements can buy catastrophic plans in the exchanges. Trump’s order could open catastrophic plans for everyone.

In addition to the executive orders, the Trump administration has slashed the ACA advertising budget by 90% and cut the open enrollment period in half this year.

ACA opponent on Capitol Hill haven’t been as successful as the president in weakening the law. The House could add an individual mandate repeal to its tax bill, but the legislation may face impenetrable obstacles in the Senate. The Senate has already failed to pass ACA repeal legislation multiple times this year. Trying to wipe out a key plank to the ACA in the Senate likely won’t happen.

If Congress fails to repeal the individual mandate, the president may once again take aim at the ACA. The president’s previous executive orders and policies have wounded the ACA, but harming the individual mandate could be the final trump card that topples the ACA exchanges.


Personal Finance

A Whole New World of Rewards for Disney Fans

Originally published on Credit Karma.

You no longer have to wish upon a star to have Mickey Mouse, Tinker Bell or even Yoda on your credit card.

Disney offers two rewards credit cards through Chase that offer all kinds of Disney-related perks: Disney® Premier Visa® Card and Disney® Visa® Card. From fun Disney and Star Wars card art to the chance to earn Disney Rewards Dollars that you can use toward Disney products or vacations, these cards are perfect for fueling your Disney fanatic side.

Disney® Premier Visa® Card takes the perks one step further by offering a more generous rewards program and introductory bonus. These add-ons come with a $49 annual fee, while Disney® Visa® Card charges no annual fee, but we still think Disney® Premier Visa® Card is the clear winner between the two.

Let’s compare the cards side-by-side to find out why.

See Credit Karma page for side-by-side comparison.

The winner: Why we prefer Disney® Premier Visa® Card

Both cards offer great Disney benefits, but Disney® Premier Visa® Card gives a little bit extra. Yes, that “extra” come with a $49 annual fee, but you can more than offset the cost if you expect to use your card for everyday purchases or plan to use the card to pay for an upcoming flight.

Extra rewards

Disney® Premier Visa® Card lets you earn 1 percent in Disney Rewards Dollars on your everyday purchases and 2 percent at gas stations, grocery stores, restaurants and most Disney locations. Those locations include Walt Disney World® Resort, Disneyland® Resort, Disney Cruise Line and more.

With Disney® Visa® Card, you only earn 1 percent on all purchases.

Option to redeem points toward flights

With the Disney® Premier Visa® Card, you can even redeem Disney Rewards Dollars toward flights. There are no airline limitations or blackout days. Just pay for a flight using your Disney® Premier Visa® Card, then redeem your Disney Rewards Dollars for a statement credit toward your ticket purchase. (Just make sure you redeem them within 60 days of purchasing your ticket.)

This flight perk means you could use your Disney® Premier Visa® Card to book a roundtrip flight to a Disney resort, enjoy card benefits while you’re there, earn more Disney Rewards Dollars while you’re at it, then fly home and partially cover your flight by redeeming your Disney Rewards Dollars.

Note that with either card, once you rack up your Disney Rewards Dollars, you can use them toward Disney and Star Wars toys and movies at Disney Store or other Disney locations. You can also request a Disney Rewards Redemption Card once you collect 20 Disney Rewards Dollars. However, it’s only with Disney® Premier Visa® Card that you can redeem points for statement credit toward flights.

As a bonus, there are no limits on the number of Disney Rewards Dollars you can earn with both cards, so you have unlimited opportunity to save up for a big Disney trip or purchase.

Special events and discounts

The following special discounts and events are available to cardholders of either Disney card.

As a card member, you have access to exclusive events at Disney Store and VIP packages when you buy premium tickets to Aladdin or The Lion King on Broadway.

You get 10 percent off select merchandise purchases of $50 or more at Disney Store and, and at select locations at Disneyland® Resort, Walt Disney World® Resort, Disney’s Beach Resort Destinations and the Aulani Resort in Oahu, Hawaii.

You and six guests can also enjoy one Disney Character Experience per day at private cardholder locations at Disney parks. Plus, you can enjoy 10 percent off select dining locations most days at Disneyland® and Walt Disney World® Resorts.

Cool card designs

Both Disney credit cards offer card art that will be the envy of your Disney-loving friends. You can choose from 10 different designs, including the Magic Kingdom, Sorcerer Mickey and Elsa. There are cards with Yoda and Darth Vader for Star Wars fans, too.

Generous introductory bonus

We’ve gone over all of the Disney perks, but this card is more than just a rewards card for Disney purchases. You also earn a $200 statement credit when you spend $500 on purchases with Disney® Premier Visa® Card in the first three months from account opening.

With the Disney® Visa® Card, you only get a $50 statement after your first purchase.

Counterpoint: Why you might want the Disney® Visa® Card instead

Disney® Visa® Card offers many of the same benefits as the premier card, but without an annual fee.

You still get the choice of 10 card designs, the prestige of a Disney card and the chance to earn 1 percent in Disney Rewards Dollars on all purchases. But you miss out on Disney® Premier Visa® Card’s added perks.

When is Disney® Visa® Card a better bet? If you don’t plan to use it much.

Maybe you already have other cards and see the Disney card as a cool addition to your wallet, but not one you expect you’ll use that often. In that case, a card without an annual fee could be a better choice.

This card might also be a wise move if you’re interested in the Disney discounts and special events, but don’t care as much about the rewards program. This card earns 1 percent in Disney Rewards Dollars across all purchases, so you may not collect rewards as quickly. The premier card rewards can add up more rapidly, but that won’t matter if you’re not interested in the perks unique to Disney® Premier Visa® Card.


What Will be the Fallout from Anthem’s New Imaging Policy?

Originally published on Healthcare Dive.

A movement health systems have been dreading is gaining speed, as commercial and government payers are implementing more and more policies that restrict reimbursements for services that can be performed outside a hospital. Anthem’s recent announcement that it will no longer pay for MRIs and CT scans performed at a hospital in an outpatient basis could be a harbinger for what’s to come.

Several hospitals and health systems have already taken steps to recapture revenue lost to these demands for pushing patients outside their walls whenever possible. But with the industry already suffering from reduced patient volumes and lower reimbursements in general, policies restricting the services hospitals count on for steady cash flow could be a major disruption.

Anthem’s new rule

Anthem plans to implement the policy in 13 of its 14 states by March 2018, with only New Hampshire exempt from the new policy. The payer has already implemented it in nine states.

Hospital officials are predictably concerned about what this could mean to their margins. Higher in-hospital reimbursement for MRIs and CT scans made them profitable, even though they’re not a major service for hospitals. One estimate said some health systems collect more than half of their profit from imaging services.

Anthem’s new policy is part of a payer movement to reduce healthcare costs by pushing patients to get care at locations less expensive than hospitals. That’s also true for another controversial Anthem policy to stop paying for Emergency Department (ED) care it deems unnecessary.

Trying to cut healthcare costs is nothing new for insurance companies, or the industry in general. For many years, payers and employers have created health plans that reward members for getting care at less expensive locations. That benefit design has resulted in patients paying more to go to specialists rather than primary care physicians and going to EDs rather than places like urgent care centers. Payers have also nudged members to get more services as an outpatient and avoid being admitted to a hospital.

Those cost-cutting efforts seem to be working. Altarum’s Center for Sustainable Health Spending’s recent Health Sector Economic Indicators reported overall national health spending growth decreased in the second quarter. A major reason for the slower spending growth was connected to hospital spending growth, which was only 1.3% rather than the expected 4% growth rate. Hospital spending growth was the slowest major healthcare category over the past year. Hospital spending increased in June by 0.8%, which was the slowest growth rate year-over-year since January 1989.

While payers have looked for passive ways to re-direct patient care in the past, Anthem’s two new policies extend beyond benefit design and go to the heart of hospital funding. In recent years, hospitals overcame lower Medicare reimbursements by making more on imaging and ED services, which have been steady profit centers. Now, hospitals in 13 states will see that funding dry up.

Anthem said its new Imaging Clinical Site of Care program dovetails with the Institute for Healthcare Improvement Triple Aim Initiative, which seeks to improve the patient experience, improve population health and reduce per capita cost of healthcare.

Anthem subsidiary AIM Specialty Health is administering the program to identify when hospital outpatient services for services like MRIs and CT scans are medically necessary. Lori McLaughlin, Anthem communications director, told Healthcare Dive getting services in a “clinically appropriate setting” like a freestanding outpatient clinic or imaging center is less expensive and clinical research shows those locations are safe.

Anthem said the policy will result in lower healthcare costs for members and the healthcare industry overall. Imaging services in a hospital can cost $1,000 more than a freestanding clinic, and that cost could fall to the patient if they haven’t met their plan’s deductible.

Anthem said AIM Speciality Health will only review the level of care if there are at least two alternate freestanding imaging centers nearby. So, imaging would be approved in rural areas that might not have more than one option for an MRI or CT scan, according to the payer.

McLaughlin said Anthem doesn’t know how much it has saved or how many hospital scans it has reduced because the plan is still so new. With the imaging policy set, McLaughlin said Anthem will continue to look for more ways to save healthcare costs.

“Anthem’s primary concern is to provide access to quality, safe and affordable healthcare for our affiliated health plan members. We’re always looking at new approaches to ensure clinical quality and improve affordability and we are committed to reducing overall medical cost where possible when the safety of the member is not put at risk,” she said.

Will other payers follow suit?

Anthem is a major insurer in more than a dozen states, so any decision will have a ripple effect in those areas and beyond.

Lea Halim, senior research consultant at Advisory Board, told Healthcare Dive other payers will likely watch how Anthem’s policy plays out.

“Will Anthem get a lot of pushback from patients and employers? Will hospital lobbies succeed in getting state governments to force Anthem to roll back the policy? If Anthem does not face, or successfully overcomes these types of challenges, other payers may very well follow suit,” Halim said.

Payers are working to bring down costs in other ways, too. One example is insurance companies buying surgical centers, said Gregory Hagood, senior managing director at SOLIC Capital Advisors, which works with hospitals on mergers and acquisitions. Another example is payers creating networks that encourage members to use alternative (i.e., less expensive) services.

Hagood expects payers will continue to look for more ways to cut costs, including reviewing elective services performed in hospitals. “We’re seeing all insurance companies trying to create an alternative network where, theoretically, the quality of these centers are what you get in the hospital, but at a lower rate because you don’t have all the overhead of hospitals,” he told Healthcare Dive.

Private companies like Anthem aren’t the only payers creating policies that cut costs and affect hospital finances. The CMS also recently announced a proposal to make costs more site neutral. With this change, CMS would pay services at off-campus hospital outpatient departments by 25% of regular outpatient rates (while increasing outpatient payments overall by 1.75%). The CMS expects the proposal would save about $500 million this year. The American Hospital Association has spoken out vociferously against the proposal.

Medicare is also proposing hip surgeries in surgery centers in addition to just hospitals. Knee and hip surgeries have the highest margins for hospitals, but Medicare is pushing more volume to outpatient services.

“Those are huge dollars you’re talking about there,” Hagood said. “It’s another where a hospital’s lucrative services like joint replacement and imaging are starting to get squeezed from both sides — from CMS and private payers.”

Impact to hospitals

Anthem’s size and importance in the 13 states where it is active means its imaging policy will affect hospital finances. However, Paul Keckley, healthcare researcher and managing editor of The Keckley Report, told Healthcare Dive many hospitals are already competing with freestanding and physician-owned facilities. So, though Anthem’s policy will affect hospitals, Keckley said those facilities are already “accustomed to the downward pressure on their margins.”

Hagood estimates that MRIs and CT scans make up only 5%-10% of a hospital’s business, but those services are profitable and have huge profit margins for hospitals.

Hagood said an MRI for a knee or shoulder would cost about $500 on average in a physician’s office, but that would swell to somewhere between $1,000 and $2,000 at hospitals in many markets. This means hospitals are making an average of $1,000 more on each procedure, he said.

Spread over a year, that’s about $800,000 more profit for hospitals, which these facilities stand to lose with Anthem’s new imaging policy.

Halim said hospitals stand to lose the reimbursements from Anthem, but those with their own freestanding imaging facilities that bill at a lower rate already should be able to capture a portion of the lost revenue.

Beyond hospital finances, the policy change would impact patients both positively and negatively. Anthem patients in a high-deductible plan will pay less out-of-pocket for an MRI or CT scan at freestanding facilities. However, patients not in a high-deductible plan and who may not pay much out-of-pocket anyway, may feel inconvenienced if they’re told they can’t get the services at their local hospital. Plus, if the ordering physician doesn’t direct the patient to a freestanding facility and the person gets the services at a hospital, Anthem could deny the claim and the patient will get stuck with the bill, said Halim.

What will hospitals do?

Hagood doesn’t think hospitals will make up the lost funding in other areas. Instead, he expects staffing cuts and hospitals squeezing vendor contracts for supplies and maintenance.

One way hospitals could respond is by working with the payer to get a little more money for imaging than a freestanding imaging center, but much less than what Anthem has been paying hospitals. Hagood said hospitals may get a “modest premium,” such as maybe get another $100 or $200 for a scan instead of the extra $1,000 Anthem has been paying them.

Halim said hospitals may accept the outpatient payment rate for hospital-based facilities in exchange for a policy waiver. Plus, they may invest more in their own freestanding imaging centers.

“If Anthem represents a significant portion of their revenue — and if the new policy sticks — that may lead some hospitals to consider investing in freestanding facilities so that they can still capture Anthem’s outpatient imaging business,” Halim said.

Personal Finance

American Express Waives Annual Fees for Military Personnel, Their Spouses

Originally published on CardRatings.

American Express offers quite the money-saving perk to military personnel: The issuer waives the annual fees for its credit cards – even for The Platinum Card® from American Express, which comes with a $550 annual fee price tag.

This is largely an under-the-radar perk, but can be a huge moneysaver for American Express cardholders, especially if you’re a service member who wants to enjoy the lucrative luxury perks that accompany The Platinum Card® from American Express. As an added bonus, the spouses of military personnel are also eligible for the annual-fee waiver.

Before you start crunching numbers only related to your annual fee savings, know this: The Servicemembers Civil Rights Act (SCRA) offers protections to active duty military personnel and their spouses when it comes to a number of financial situation and loan terms and those terms apply regardless of credit card issuer. Amex takes it a step further, however, with the annual-fee waiver. More on the SRCA below, but first, let’s look at some of the top Amex cards military personnel should consider in light of this annual-fee waiver perk.

American Express cards for military personnel

So, now that you know you can get your American Express annual fee waived as an active service member or spouse of a service member, what are some American Express cards to check out?

Well, since that annual fee is going to be waived, you might as well take advantage of some of the fantastic perks (airport lounge access, for instance, with The Platinum Card® from American Express) available with higher-annual-fee cards. In fact, you and your spouse could apply separately to really take advantage of the features and rake in the rewards.

The Platinum Card® from American Express

The Platinum Card® from American Express is the perfect card to have when the card waives the annual fee. Why? It has a $550 annual fee, but servicemembers can benefit from the card’s perks without paying the annual fee that would otherwise be cost-prohibitive.

This is a premium credit card, and you get a lot with it including a generous rewards program if you’re a frequent flyer. The card offers a whopping five-times the Membership Rewards® points on flights booked directly with the airlines or with American Express Travel. Plus, you get a 60,000-point bonus when you spend $5,000 on your card in the first three months.

The card offers many travel-related perks, including access to hundreds of airport lounges through the Global Lounge Collection, 24/7 access to the Platinum Club Concierge who can help with travel arrangements, and a credit to cover your Global Entry or TSA Precheck™ application fee every five years. Plus, cardholders have access to the Hotel Collection and Fine Hotels and Resorts programs, which give members perks such as hotel credits for spa services and meals and complimentary WiFi and room upgrades at select hotels. And, as you would expect with a card of this caliber, you won’t be charged foreign transaction fees when you use your card while abroad.

The Platinum Card® from American Express also gives you up to $200 a year in statement credit to cover travel-related charges like baggage fees and in-flight refreshments that you charge on your card.

Not too shabby when you consider you won’t be paying any annual fee.

Blue Cash Preferred® Card from American Express

The Blue Cash Preferred® Card from American Express doesn’t have an untouchable annual fee – it’s just $95, and, thanks to a special offer, that’s waived for everyone for the first year, but as a member of the military you don’t even have to worry about it after the first year. So, while The Platinum Card® from American Express is probably the card you want to consider first given the huge annual fee savings, the Blue Cash Preferred® Card from American Express is a worthwhile candidate for the second slot in your wallet.

The reward categories for the Blue Cash Preferred® Card from American Express make it an excellent card for your everyday spending; you earn 6 percent back on the first $6,000 spent annually at U.S. supermarkets, 3 percent back on purchases at U.S. gas stations and select U.S. department stores and 1 percent back on all your other purchases. By the way, most supermarkets these days sell a host of gift cards and, yes, you can earn 6 percent back when you buy gift cards at those supermarkets.

Since you, as a member of the military, are eligible for waived annual fees, consider carrying both the Blue Cash Preferred® Card from American Express for your everyday spending AND The Platinum Card® from American Express with which you earn maximum rewards on your travel and enjoy those luxury travel perks described above.

There’s really no reason not to carry both cards and those rewards you’ll be racking up will come in handy down the road.

Premier Rewards Gold Card from American Express

Premier Rewards Gold Card from American Express is another exclusive card that charges a $195 annual fee (waived for everyone the first year). It also offers a travel-related rewards program, but it adds restaurants, gas stations and supermarkets to its rewards categories, making this another excellent option for your everyday purchases.

The card offers three times the points for flights booked directly with airlines; two points per $1 spent at U.S. restaurants, gas stations and supermarkets; and one point per $1 for all other purchases. The card also gives you 25,000 points when you use the card for $2,000 worth of purchases in the first three months. In addition, you are also eligible for a $100 airline fee credit to cover baggage fees at one pre-selected airline and a $75 hotel credit and room upgrades through The Hotel Collection.

Overall, the travel rewards are not as generous as with The Platinum Card® from American Express and the everyday rewards aren’t as high as with the Blue Cash Preferred® Card from American Express, but if you’re committed to carrying only one credit card, rather than combining the rewards from both The Platinum Card® from American Express and the Blue Cash Preferred® Card from American Express as described above, the Premier Rewards Gold Card from American Express offers the best of both worlds.

How to request a waived fee and SCRA benefits from American Express

If you already have an American Express card, you can call American Express at 1-800-253-1720. Tell the representative that you’re an active duty military member and request a waiver of your card’s annual fee as well as the SCRA protections for your card. Don’t be deterred if the customer service rep isn’t familiar with these benefits; just request to speak with a supervisor. You should also expect to answer a series of questions about your military service.

You can also contact American Express online. American Express allows you to log into your account and request SCRA benefits. Once you’ve made contact with American Express, you can also send a copy of documents with the account number to: American Express, Attn: Servicemembers Civil Relief Act, PO Box 981535, El Paso, TX 79998-1535. It’s a good idea to contact the company before sending your documents, so Amex is aware that you’re sending documentation its way.

Once American Express has your information, it will review your SCRA eligibility to confirm you are an active duty military member or the spouse of an active service member. American Express will examine the provided documents and check the Department of Defense Manpower Data Center. Be aware that, depending on how long the verification process takes, you may have to pay the annual fee up-front before being reimbursed when your status is verified.

Even if you don’t choose to take advantage of the annual fee waiver offered by American Express (but, really, why wouldn’t you?) each credit card issuer has a similar process to verify your eligibility for SCRA benefits even though they don’t necessarily waive the annual fee, so contact your card company by phone or online and it can start the verification process.

Speaking of the SCRA, just what are some of the benefits? Keep reading to find out.

SCRA protection for active military members

American Express goes above and beyond with its annual-fee waiver, but there is federal legislation that caps interest rates for active servicemembers and their spouses and that law applies to credit cards beyond those issued by American Express.

Congress passed the Servicemembers Civil Rights Act (SCRA) in 2003, which expanded the Soldiers’ and Sailors’ Civil Relief Act of 1940. The SCRA protects the finances of military members (and their families) while they are on active duty. The provisions deal with rental agreements, security deposits, mortgage interest rates, health insurance, income tax payments, mortgage foreclosures, and yes, credit cards.

To be eligible, you must be a:

  • A member of the U.S. Armed Forces on active duty or a reserve component called to active duty,
  • National Guard personnel under a call or order to active duty for more than 30 days,
  • A Public Health Service and National Oceanic and Atmospheric Administration commissioned officer,
  • A U.S. citizen servicing with another nation, which is allied with the U.S. “in the prosecution of a war or military action,” or
  • The spouse of an active duty servicemember.

The SCRA caps active military members’ interest rate at 6 percent for financial obligations incurred before military service. The servicemember must provide the creditor with a copy of his/her military orders and a written notice to take advantage of the interest rate cap, but that’s not a bad hoop to jump through for an interest rate cap that could literally save you hundreds of dollars if you happen to have some credit card debt you’re working to pay off.

The creditor must forgive interest greater than 6 percent. It can’t defer it to later and must also forgive the interest retroactively. Military members have until 180 days after their end of service to send the required documents to the creditor.

Healthcare, Insurance

CareSource Will Cover Final County Without an ACA Option in 2018

Originally published on Healthcare Dive.

CareSoure announced Thursday it will cover the last county at risk of having no Affordable Care Act (ACA) plans in 2018. CareSource will offer health insurance plans in Paulding County, Ohio, which the Kaiser Family Foundation (KFF) said was the only “bare county” left.

The Dayton, Ohio-based payer was also one of five insurers that recently announced they will cover 19 other bare counties in Ohio. Altogether, more than 11,000 Ohioans have ACA coverage in those counties.

All U.S. counties are now expected to have at least one ACA plan option. However, nearly one-quarter of ACA plan enrollees will only have one option, which means there is no competition in those areas.

In a statement from CareSource, the company said its decision to offer plans in bare counties “speaks to our mission and commitment to the marketplace and serving those who are in need of healthcare coverage.”

Ohio Department of Insurance Director Jillian Froment said filling the bare counties has been a priority for her department. “There is a lot of uncertainty facing consumers when it comes to health insurance and these announcements will provide important relief,” she said.

The Ohio Department of Insurance said it is working with payers to finalize products and rates in the ACA exchanges next year. The department expects to complete review of insurer filings by early September, before payers must sign contracts with the federal government by late September to offer ACA plans.

Although she is pleased to have the bare counties filled for 2018, Froment said the move is only a “temporary solution and one that only applies to 2018.” She called on Congress to pass legislation to stabilize the individual insurance market. Congress is expected to take up the issue when it returns from break.

One area that is causing much unease is whether President Donald Trump will continue to pay cost-sharing reduction (CSR) subsidies to insurers. The CSR payments help ACA insurers cover lower income Americans. Trump has threatened multiple times to stop CSR payments to insurers, but so far he has ultimately paid the subsidies. Without those subsidies, the Congressional Budget Office predicted ACA premiums would skyrocket another 20%.

“Insurers are still looking for predictability in the health insurance market. Now is the time for Congress to work on reforms that will strengthen our health insurance markets in ways that improve access and affordability,” said Froment.

There was a time not too long ago when healthcare and state officials fretted about dozens of potential bare counties in 2018. That included nearly all Nevada counties. However, Nevada Gov. Brian Sandoval announced last week that Centene agreed to sell ACA plans in the 14 bare counties in Nevada. Centene also recently filled the final county in Indiana.

The St. Louis-based insurer has been expanding its ACA footprint this summer, while other major payers are pulling back or completely out of the exchanges. Centene is also entering Kansas and Missouri and expanding its footprints in Florida, Georgia, Indiana, Ohio, Texas and Washington.

Filling in all of the counties is good news, but there is still the issue of competition. Nearly one-quarter of members in ACA plans will have only one choice and another one-quarter will have just two choices. There is also concern about large premium increases. Early rate filings have already shown the negative effects of uncertainty.

Opponents of the ACA plans say the market is in a “death spiral.” However, the KFF found in a recent report the individual health insurance market is actually stabilizing, and insurers are regaining profitability. KFF warned there are “more fragile” parts of the country and uncertainty coming from Washington could destabilize the market.

So, the question remains: Is 2018 a year of transition for the ACA market that is stabilizing? Or will political fighting continue to cause unease and ultimately topple the exchanges in some parts of the country? Congress could go a long way to stabilize the market by agreeing to fund the CSR subsidies long-term and take that decision out of the hands of the president.


Health Reform Driving Payer-Provider Partnerships

Originally published on Healthcare Dive.

Payers and providers have for decades stayed in their silos, leading to a more fractured and adversarial healthcare system. That relationship, however, is starting to soften for many in the industry. Payer-provider partnerships put the two groups on the same team in hopes of reducing costs and improving care and outcomes through sharing data and better communication.

A major driver of these partnerships is the move away from fee-for-service payments and toward valued-based payments and population health management.

“We’ve been tracking these partnerships for many years now and of the approximately 200 that have launched in the last five years, 92% are emphasizing value-based compensation in some shape,” Thomas Robinson, partner at Oliver Wyman, told Healthcare Dive.

The payer-provider partnerships popping up across healthcare vary in type, size, location and model. There are 50/50 joint ventures with co-branding, and less intensive partnerships like accountable care organizations (ACO), patient-centered medical homes (PCMH), pay for performance and bundled payments. Oliver Wyman found the partnerships can be broken down depending on providers’ appetite for risk.

The differences are endless, but they all focus on improving care for the individual patient. They do this through close communication between stakeholders, better interoperability and data-sharing, using data analytics to track patients and reducing administrative burdens.

Keys to partnerships: Trust, communication and a focus on the patient

The first step in these partnerships is building trust between payers and providers. Robinson said that can be difficult, as payers and providers may have an fractured relationship. Payers and providers can overcome differences by aligning around the big issues as early as possible, and establishing the right governance model.

Chuck Lehn, president of Banner Health Network, told Healthcare Dive a successful joint venture allows each organization to offer its administrative strengths and have a clear understanding of its roles and accountabilities.

“In our experience, we have found that streamlining the administrative pieces of our product can lead to better efficiency and a great member experience,” said Lehn.

Brigitte Nettesheim, president of transformative markets for Aetna, told Healthcare Dive partnerships necessitate a culture change, and participants need to understand they’re both in it for the long run. This requires aligning responsibilities and carefully crafting, negotiating and planning down to the most minute detail before the partnership is signed and executed.

Another key is communication. Lehn acknowledged that communicating across systems and platforms between two organizations and healthcare providers requires time, attention and resources. In a successful partnership, both sides need to communicate regularly and invest in technology, such as portals, so the two sides can share data seamlessly.

Caring for the whole patient works best when payers and providers share data, so there is improved care management, better interventions and better analytics around population health. This requires a capital commitment, so there is communication between not only payers and providers, but also between those two groups and patients, said Robinson.

The two sides can go much deeper into care for patients by going beyond claims. In partnerships, payers shouldn’t have to wait for claims to see how their members are doing and doctors shouldn’t have to hope that their patients tell them when they have received care elsewhere. All of that data should be shared freely and promptly.

“Most communication has been traditionally centered around transactions. That’s just not sufficient anymore, ” James Leatherwood, marketing communications manager at Availity, told Healthcare Dive.

In addition to regular back and forth, payers and providers need regular meetings, whether monthly or quarterly, that focus on strategic issues about the partnership, said Leatherwood.

The third part of a successful partnership is aligning incentives that focus on keeping people healthy and creating a positive healthcare experience, said Robinson.

Partnerships must provide patients the right incentives, integration, investment, insight and innovation to work with the plan to deliver improvements across cost, quality, outcomes and experience, said Robinson.

“The point of these partnerships is to create something new, rather than just building the same old offerings with a narrow network. Successful partnerships will take the opportunity to innovate around the product and experience now that the incentives, insight, investment and integration are all for it,” said Robinson.

Partnerships to watch

Payers that are involved in partnerships vary from new players in the payer space like Oscar Health and Bright Health to large, established insurers like Aetna, various Blues and Cigna.

Here is a handful of the closely watched partnerships:

Aetna is one payer to watch in the partnership arena. Nettesheim said the company has committed to moving 75% of its contracts to value-based arrangements by 2020. Aetna is currently at 48%.

Aetna and Banner Health agreed on the partnership in October 2016 and have been laying out the groundwork before its launch this month in Maricopa and Pinal counties in Arizona. The two companies hope to expand the program statewide ultimately.

To prepare for the partnership, Tom Grote, who became CEO of Banner | Aetna joint venture in May, told Healthcare Dive that Banner Health and Aetna have developed joint operating committees, including marketing/sales and population health, that include members from both organizations.

The partnership looks to improve consumer experience by fully integrating providers, Aetna and administrative services, while eliminating redundancies in care and administrative problems. Aetna and Banner Health expect streamlining care and services will lead to savings for patients and employers.

Nettersheim said the partnerships are about “each side playing to its strengths, aligning incentives and driving scale.”

The two companies have worked together for more than five years on a separate ACO. The ACO has resulted in nearly $10 million in savings, a 24% drop in avoidable surgical admissions and increased generic drug prescribing rates by 4%, according to Aetna.

Grote said the key to partnerships is a common vision between the entities and leadership that healthcare needs to move to a value-based system.

“If we keep the customer — the end user — in mind and build partnerships with that as our North Star, we believe we will have a more successful, efficient and collaborative health system,” said Grote.

Nettersheim said most provider-sponsored health plans formed since 2010 haven’t shown a profit yet. In some cases, this is because they aren’t yet able to scale up to what is needed to create profits.

Aetna’s partnerships with Banner, Allina and Sutter Health are still too new to find results, but Nettersheim is confident that Aetna’s partnerships will achieve scale by offering stability, expertise, volume and market power.

Another partnership to watch is Blue Cross Blue Shield of Michigan’s (BCBSM) PCMH, which is the largest medical home project in the country. The model is part of BCBSM’s Value Partnerships, which works with physician organizations and hospitals to improve patient care and provide value to members and customers.

The PCMH program isn’t a 50/50 co-branded joint venture like Banner | Aetna, but is an example of a less intensive partnership looking to have a similar result. The PCMH started nine years ago and includes 4,692 physicians in 1,709 practices. There are PCMH practices in 81 of Michigan’s 83 counties.

The idea of a PCMH began a decade ago as a way to improve care and outcomes while cutting costs. The model has primary care physicians leading care teams, which include specialists, that focus on each patient by tracking conditions and making sure patients get care “at the appropriate time and in the most appropriate setting,” according to BCBSM.

The payer said they have seen success. This year, PCMH practices are performing better than other practices. Blue Cross Blue Shield of Michigan said PCMH practices have seen 19% lower rate of emergency room (ER) visits for adults; 23% lower rate for primary care sensitive ER visits for adults; 25% lower rate of ambulatory care sensitive inpatient stays for adults and 15% lower rate of pediatric ER visits.

“If we keep the customer — the end user — in mind and build partnerships with that as our North Star, we believe we will have a more successful, efficient and collaborative health system, ” Tom Grote, CEO of Banner | Aetna joint venture, told Healthcare Dive.

A recent Health Services Research report also found that hospital per-member per-month cost was reduced by 17.2% and emergency department per-member per-month cost was reduced by 9.4% for Blue Cross PCMH patients with asthma, angina, diabetes, chronic obstructive pulmonary disease, high blood pressure and congestive heart failure.
Tom Leyden, director II of the Value Partnerships Program at BCBSM, told Healthcare Dive members actively engaged with their primary care physicians are seeing better outcomes. What’s made the BCBSM program a success is “strong relationships that have been cultivated within the Michigan healthcare community,” he said.

Leyden said providers want to be active participants in system transformation.

“This requires ongoing support from the payer and demonstrated evidence of practice transformation and clinic results from the provider community,” said Leyden. “Administration of these programs is an integral aspect of measuring performance.”

Leyden said the payer strives to make the programs as manageable as possible because physicians need to perform many administrative tasks on an ongoing basis. BCBSM regularly solicits feedback from providers during quarterly meetings and phone calls, emails, webinars and in-person meetings on what’s working, what’s not and what needs to be changed.

Barriers to overcome

One barrier that still needs resolution in partnerships is moving providers away from phone communication. Availity recently published a survey of 40 health plans and more than 400 practice- and facility-based providers that found respondents said phone communication is the preferred way for providers to communicate with payers.

Leatherwood said a more efficient way is a queue system. In this system, a provider could check the status of all claims and get alerts when they need to provide more information. The system would allow providers to look in one queue, update the claims information and then move on with their day. Payers would have their own queue and would get alerts when providers have questions. This would reduce phone calls and create immediacy.

Leatherwood said the healthcare system is stuck in a “chart chase” between providers and payers, and moving to an automated queue system would be a gamechanger.

Another big question is whether partnerships can scale. Expanding these partnerships beyond local or state boundaries may be difficult. Grote said partnerships are intensive and require close relationships, so joint ventures work best on a regional or state level.

It’s still too early in the process to say how partnerships will morph down the road. There are many different types of partnerships and more are likely to develop depending on locations, providers, payers and needs.

“I think in the near-term what we’re going to see is larger healthcare providers are going to be more strategic, working directly with payers. The health plans are going to be more interested not just in working with the staff level, but executive levels,” said Leatherwood.


Alzheimer’s patients need special care, but providers aren’t ready to give it

Originally published on Healthcare Dive.

Diagnoses of Alzheimer’s disease have been increasing and are expected to skyrocket, but the health system has been slow to respond. Death rates are going up and there are still no prevention methods or long-term treatments.

The neurological disease is the leading cause of dementia and is one of the most feared conditions. It also leads to twice as many hospital stays and has an overall high cost of treatment.

“I think America, in general, is waking up to the fact that we haven’t done enough,” Rob Egge, chief public policy officer at the Alzheimer’s Association, told Healthcare Dive.

People are living longer and there is better recognition of the disease. Now, 1 in 10 Americans 65 and older has Alzheimer’s disease. Diagnoses will increase as more Baby Boomers reach their elderly years. Alzheimer’s is now the sixth leading cause of death in the U.S. and kills more than breast cancer and prostate cancer combined.

Alzheimer’s disease diagnoses and deaths have increased over the past 20 years —  and those numbers are expected to skyrocket over the next 30 years.

The Centers for Disease Control and Prevention recently released a study showing death rates from Alzheimer’s increased 55% from 1999 to 2014. About 5.5 million Americans are living with Alzheimer’s and that’s expected to reach 16 million by 2050.

It’s not just the elderly. About 200,000 Americans under 65 have younger-onset Alzheimer’s. “That alone would be a major health problem,” Egge said.

There doesn’t appear to be much immediate help either. While fatality rates have decreased for other diseases thanks to medical breakthroughs and treatments, there is still no prevention, cure or even a way to slow Alzheimer’s. Healthcare can only offer Alzheimer’s and dementia patients short-term symptom relief. Egge said that might help for six months, but much more is needed to improve patients’ lives.

Some health systems are taking steps toward better preparation, however. Experts recommend using staff training and interdisciplinary physician teams as well as simpler measures like adjusting patient visiting hours.

Alzheimer’s and healthcare costs

Healthcare costs skyrocket when someone has dementia. More than 85% of people with Alzheimer’s have one or more other chronic conditions, which increases healthcare costs. People with Alzheimer’s often can’t manage their co-morbidities, which leads to more health problems, hospitalizations and costs.

Alzheimer’s is expected to cost $259 billion in 2017 with $175 billion directly from Medicare and Medicaid. That’s expected to reach $1.1 trillion by 2050. Twenty-four states will see Medicaid spending for people with Alzheimer’s disease increase at least 40% before inflation by 2025, according to the Alzheimer’s Association.

Nearly one dollar of every five Medicare dollars is spent on dementia care. Within 20 years, that’s expected to rise to one in three.

Hospitalizing Alzheimer’s patients

People with Alzheimer’s and other dementias are more likely to have co-morbidities and staff may not even know about other health issues because of a patient’s communication limitations.

Older people with Alzheimer’s have twice as many hospital stays per year as other older Americans. They also have four times longer hospital stays and nearly three times more emergency department visits.

Caring for someone with Alzheimer’s is complicated and can take more nurse and doctor resources, which can put a strain on staff. Hospitalization can often raise anxiety and confuse people with Alzheimer’s. They’re in a different environment and might not know what’s happening. That anxiety is increased and is often coupled with pain. Often they’re hospitalized for issues not related to the disease, such as heart disease or a hip fracture.

“People with Alzheimer’s really need a lot of care,” Dr. Kostas Lyketsos, professor of psychiatry and behavioral sciences at Johns Hopkins Medicine, told Healthcare Dive.

The Alzheimer’s Association suggests avoiding unnecessary hospitalizations and says doctors should perform procedures, tests and treatments in an outpatient client whenever possible.

How hospitals are facing the crisis

Demands will increase on doctors, hospitals, payers, Medicare and Medicaid as the number of people with Alzheimer’s increases.

Hospitals and health systems do have options for improving their ability to care for people with Alzheimer’s.

Lyketsos said an important first step is to make sure hospitals are evaluating patients with the disease. Johns Hopkins started the Memory and Alzheimer’s Treatment Center, which is a partnership between the departments of psychiatry, neurology and geriatric medicine, and sees close to 1,000 new patients annually. The center performs a patient assessment, diagnosis and comprehensive treatment that includes counseling, education and guidance for family caregivers.

The center developed a program called Maximizing Independence (MIND) at Home, which is a home-based coordination program for people with Alzheimer’s and other dementias. The program lets people stay in their homes, while receiving care through care coordination with community-based agencies, medical and mental healthcare providers and community resources.

The interdisciplinary team uses six basic care strategies: resource referrals, attention to environmental safety, dementia care education, behavior management skills training, informal counseling and problem-solving.

The program’s main tenets are to assist family caregivers and allow people to live safely and with dignity in the community.

Johns Hopkins is in the research phase of the program and is testing whether MIND at Home is an “effective and cost-efficient approval to providing community-based dementia care to a diverse population.”

So far, program leaders have found that MIND at Home reduces a caregiver’s burden and that Alzheimer’s patients need a whole package of services to meet their myriad needs, including making sure they’re complying with medications and setting up a proper home environment for the Alzheimer’s patients.

Lyketsos said the program can delay Alzheimer’s patients from being forced out of their home and into a nursing home. Lyketsos said Johns Hopkins hopes to expand the program to a larger audience after the project’s research phase.

What hospitals can do better

Egge said the most important thing hospitals and health systems can do to tackle the influx of Alzheimer’s patients is to track the patient’s cognitive impairments from admissions to post-discharge. Hospital staff should be aware of a patient’s Alzheimer’s and deliver care accordingly.

Lyketsos said hospitals need to improve Alzheimer’s detection. Treating someone with Alzheimer’s in the hospital and post-discharge is more complicated than other patients.

Only 30-40% of Alzheimer’s patients are recognized by hospitals. So, knowing at the time of admission of a person’s Alzheimer’s diagnosis is key to the rest of the patient’s hospital stay and post-discharge.

Another issue is that doctors and nurses might not recognize symptoms of younger people with early onset Alzheimer’s. “That, too often, is a fumble,” said Egge.

In addition to better detection, hospitals need to plan carefully for a patient’s post-discharge care to reduce rehospitalizations. Transitioning a patient back to the home with caregiver support can help keep an Alzheimer’s patient from returning to the hospital.

Beyond care, Egge said hospitals should create policies that help Alzheimer’s patients. For instance, don’t enforce visiting hours strictly for caregivers. Sundowning is a time of confusion and restlessness for patients. Having a caregiver there during those times can calm the patient, but strictly enforcing visiting hours may limit when a caregiver is with the patient.

Lyketsos said the CMS also needs to do a better job reimbursing doctors who are caring for Medicare patients. Paying doctors for half-hour visits for older people, especially those with complicated conditions like Alzheimer’s, is often not enough.

CMS recently took a positive step by implementing a Medicare billing code G0505 that is for cognitive assessment and care planning for patients with cognitive impairment. The services can include cognition-focused evaluation, functional assessment, review of high-risk medications, evaluating neuropsychiatric and behavioral symptoms, safety evaluations and creating a care plan.

Egge said G0505 will lead to “more holistic reimbursements for care planning services.” He said he hopes the CMS will apply the code broadly to include other offerings, such as Medicare Advantage.

Looking ahead, Egge said the explosion of Alzheimer’s patients over the next 30 years is going to cause serious issues in healthcare. “It’s going to be tremendously profound and difficult for the healthcare system,” said Egge.


Children’s Hospitals — And Their Patients — Caught in the Crosshairs with Planned Federal Cuts

Originally published on Healthcare Dive.

Republican plans targeting federal funding for health coverage have drawn ire from Americans in all corners of the country, but some of the loudest voices are coming from parents. They have cornered members of Congress at town halls to ask how the slashed budgets will affect some of society’s most vulnerable.

Suggested cuts to Medicaid and the Children’s Health Insurance Plans (CHIP) would throw millions of Americans off insurance and leave hospitals that are already teetering financially facing more uncompensated care. Children’s hospitals, safety net hospitals and rural hospitals will be most affected, and disabled children will face devastating cuts in coverage.

The funding decreases have been proposed in bills making their way through Congress and separately by President Donald Trump. They would shift the cost burden further onto states, many of which have seen success in expanding Medicaid, which is also on the chopping block.

“Children, the elderly, the disabled, and others from our most vulnerable populations would all be affected by these deep budget cuts,” Joanna Hiatt Kim, vice president of policy at the American Hospital Association, told Healthcare Dive. “For hospitals, this could mean more uncompensated care as millions continue to seek needed healthcare without any coverage. For the patient, this could mean delayed care or foregoing care altogether.”

Impact on children’s healthcare

More cuts to Medicaid and CHIP would reverse the trend of fewer uninsured Americans, including children.

Congress created CHIP 20 years ago when 15% of children were uninsured. CHIP, the Affordable Care Act and Medicaid expansion provided more insurance offerings and now only about 5% of children are uninsured. CHIP, which is a federal/state partnership, includes free well-child visits in many states and also provides prescription coverage, inpatient and outpatient care and emergency services.

While suggesting a two-year CHIP extension in his budget plan, Trump proposed a 20% CHIP cut over the next two years. His budget also seeks a $610 billion cut from Medicaid over 10 years, despite early promises to leave the program alone.

Studies have shown that CHIP helps reduce hospitalizations and child mortality, and improves quality of care. The program has bipartisan support. However, HHS Secretary Tom Price voted twice against expansion when he was a congressman.

CHIP is up for reauthorization by Sept. 30 and governors recently spoke out in favor of expanding it. In his budget proposal, Trump proposes a two-year extension of CHIP, but also suggests program cuts, including the matching rate for states.

Jim Kaufman, vice president of public policy at Children’s Hospital Association (CHA), told Healthcare Dive that CHIP helps children’s hospitals.

“CHIP is good for kids, and that makes it good for children’s hospitals and children’s providers,” Kaufman said.

Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, told Healthcare Dive that the cuts would shift costs to states and reduce benefits. He said Trump’s budget would eliminate a 23-percentage-point increase in each state’s federal CHIP matching rate, which is in effect until 2019. That would mean $3.5 billion cut from the program.

The budget would also cut CHIP funding for children with families that have incomes above 250% of the federal poverty line, which would affect 28 states and Washington, D.C. that provide CHIP coverage to children above the income threshold, according to Park.

This will mean states will need to pick up more of the CHIP program costs if they want to maintain the current coverage level. Park said he believes Congress will reauthorize the program, but questions remain about CHIP’s funding and benefits.

Children are about half of Medicaid’s enrollment

The CHA released a report in May that said changes to Medicaid will hurt children, who are the largest group covered under Medicaid. Disabled children will feel the brunt of the pain.

Park said Trump’s proposed budget goes well beyond the Medicaid cuts included in the American Health Care Act (AHCA). The House plan would cut Medicaid by 24% over 10 years. Trump’s budget would reduce the Medicaid budget by 45% in that period.

Park said children make up about half of Medicaid enrollment, but cause very little in costs. Seniors and people with disabilities make up about one-fifth of enrollment, but about half of costs.

Forty-five percent of children with special healthcare needs are on Medicaid. If those children don’t get insurance elsewhere, hospitals would feel the financial burden of caring for those higher cost children without getting reimbursed by Medicaid.

The House approved the AHCA in May, which proposed Medicaid per capita caps starting in 2020 that would be based on 2016 federal Medicaid spending. In a study earlier this year, KFF said that creating a Medicaid block grant or per capita cap “would shift risks and costs to states, enrollees, and providers and could result in reductions in coverage for children.”

Children’s hospitals would be affected more than many other hospitals. The average children’s hospital pay mix is about 54% Medicaid, so children’s hospitals are especially vulnerable if there are large cuts to Medicaid and CHIP at the federal and state levels. Uncompensated care has dropped since CHIP and Medicaid expansion. Kaufman estimated that uncompensated care is an average of about 2% now.

“Since Medicaid is the largest payer of children’s healthcare services and the largest payer for children’s hospitals, the proposed Medicaid cuts included in the AHCA would have a significant impact on the more than 30 million children covered by Medicaid,” said Kaufman. “The states would cut coverage, benefits and access to care. Cuts of this magnitude will have a negative impact on all children’s healthcare.”

The Congressional Budget Office predicts 23 million Americans would lose their health insurance by 2026 under the newest version of the AHCA.

Park said the CBO score confirms the House bill isn’t fixable. “It’s clear just from the cost shift that kids would certainly be facing cuts if the House bill was enacted,” he said. “And that would be particularly problematic for kids who need Medicaid coverage that isn’t provided by private insurance.”


Healthcare, Insurance

DOJ sends warning shots on Medicare Advantage overpayments

Originally published on Healthcare Dive.

The Medicare Advantage (MA) program seems to be hitting the sweet spot, with more interest from beneficiaries as well as insurers. It now includes one-third of all Medicare beneficiaries, and a large chunk of payer profits.

With more money, however, comes greater scrutiny. And the federal government is finding reason to ramp up efforts as it issues more allegations of insurers changing diagnoses to bring in higher MA payments and covering up the actions.

Congress created Medicare Advantage as a risk adjustment payment program that pays insurers more for sicker beneficiaries. Payers in Medicare Advantage now receive a yearly fee for each enrolled member and monthly risk adjustment payments for each enrolled beneficiary, based partly on the person’s health status. This means a person with diabetes and other chronic health conditions will bring a larger monthly reimbursement than someone who needs few services.

Such a program is open to fraud. CMS estimated that it overpaid $14.1 billion in 2013 to MA organizations. Medicare Advantage payers received about $160 billion in 2014 for approximately 16 million beneficiaries. CMS estimated about 9.5% of those payments were improper.

Intensive coding

Kip Piper, an expert on Medicaid, Medicare and health reform, told Healthcare Dive plans differ in their internal capabilities and data quality. “Each insurer is incentivized to make sure their data supports the highest risk score — as high as can be justified but of course no higher,” he said, adding, “Sometimes insurers will ‘leave money on the table’ because they are unable to show that their risk score really ought to be higher.”

Timothy Layton, an assistant professor at Harvard Medical School who researches the health insurance markets, told Healthcare Dive Medicare Advantage overpayments are driven partly by fraud, but mostly by “legal intensive coding.”

“CMS has a fairly broad definition of an acceptable diagnosis. Each diagnosis just needs to be justified by some record from a face-to-face encounter with a physician. This allows insurers significant ability to maximize their risk scores without resorting to fraud,” he said.

Layton said there is fraud, but that’s “small potatoes” compared to excessive payments because of intensive coding. “It’s also small relative to the massively inefficient expenditures insurers are investing in coding that has basically no social benefit whatsoever,” he said.

UnitedHealth cases

The U.S. Department of Justice (DOJ) is involved in two high-profile False Claims Act cases involving one of the largest health insurers. The DOJ joined two lawsuits involving UnitedHealth Group (UHG), which is the largest Medicare Advantage payer with more than 50 Medicare Advantage and drug prescription plans.

The lawsuits allege UHG overcharged the federal government for Medicare Advantage. In 2016, CMS reportedly paid UnitedHealth $56 billion for covering 3.6 million Medicare Advantage beneficiaries.

Two whistleblowers have said UnitedHealth changed diagnosis codes to make patients seem sicker. These “data-mining projects” can raise Medicare reimbursements by nearly $3,000 for every diagnosis. The suit alleges that employees collected bonuses for making these changes.

The lawsuit said UHG didn’t notify the CMS of at least 100,000 invalid diagnoses that caused it to overpay. Those incidents alone led to $190 million in overpayments, according to the lawsuit.

UnitedHealth Group denies the claims. “We are confident our company and our employees complied with the government’s Medicare Advantage program rules, and we have been transparent with CMS about our approach under its unclear policies. The complaint shows the Department of Justice fundamentally misunderstands or is deliberately ignoring how the Medicare Advantage program works. We reject these claims and will contest them vigorously,” Matt Burns, UnitedHealth spokesman, told Healthcare Dive in a statement.

Piper said he expects a “long, protracted and expensive battle” involving these cases. The case is complex because the payments are from years ago and federal policies were “particularly muddy back then.”

If United were to lose, Piper expects a multi-billion dollar payment and a corporate integrity agreement with the HHS Office of Inspector General that would include oversight and imposed processes to make sure it doesn’t happen again.

Piper doesn’t think the cases would hurt UnitedHealth financially because the large payer is “well-capitalized and in a position to cover the loss if it comes to that.”

Piper doesn’t expect the CMS would restrict UnitedHealth’s participation in Medicare Advantage or Part D because of its market size. Such restrictions would affect millions of beneficiaries.

“It will, and likely already has, resulted in greater scrutiny of United’s practices in regards to risk adjustment. But federal policies have tightened. All Medicare Advantage plans are now on guard to be extra cautious and take steps to support risk scores with data, analyses and independent verification or audits,” said Piper.

DOJ investigating other MA insurers

Investigators will follow the money, and with billions of dollars at stake, Medicare Advantage plans now get extra attention, undesired by payers. False Claims Act cases and settlements have become relatively common.

Chief Counsel to the Inspector General Gregory Demske of the HHS Office of Inspector General said his office will continue to make sure “Medicare Advantage insurers . . . play by the rules and provide Medicare with accurate information about their provider networks and their patients’ health.”

Being the largest Medicare Advantage payer puts a large bull’s-eye on UHG’s back, but investigations into overpayment to Medicare Advantage payers aren’t just connected to UHG. Investigators are also checking into other Medicare Advantage payers, including Aetna, Cigna, Health Net and Bravo Health.

Also, Freedom Health, another Medicare Advantage payer, agreed to pay $31.7 million to settle a False Claims Act case after the Tampa, Fla.-based insurer submitted or caused others to submit “unsupported diagnosis codes to CMS,” which led to larger than owed reimbursements from 2008 to 2013. The company reportedly made “material misrepresentations to CMS regarding the scope and content of its network of providers” in applications in 2008 and 2009, said the DOJ.

Congress is also interested in the overpayment issue. Sen. Charles Grassley, chairman of the Senate Judiciary Committee, sent a letter to CMS Administrator Seema Verma in April questioning what CMS is doing to “implement safeguards to reduce score fraud, waste and abuse.”

Grassley said there was about $70 billion in improper Medicare Advantage payments between 2008 and 2013 because of “risk score gaming.”

“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.

What should MA payers do now?

Layton said payers need to be more careful about submitting only justified codes. This will mean more payer oversight, which will lead to more costs for them and healthcare in general.

“They’ll just switch from trying to derive codes out of thin air to trying even harder to get docs to write things down. Given that the fraud was likely for cases that could have been justified with a written record with a bit more effort, they’ll likely just exert that extra effort. Unfortunately, the cost of that extra effort will represent additional socially wasteful spending on top of an already enormous amount of waste,” he said.

Anand Shroff, founder and chief development officer at Health Fidelity, told Healthcare Dive that health plans need to focus on risk adjustment coding accuracy to ensure they submit information to the CMS that’s substantiated by documented clinical evidence.

“Medicare Advantage insurers use outdated risk adjustment coding methods, including archaic data acquisition and document review systems. They should invest in the latest risk adjustment technology solutions that pull together patient risk factors and clinical evidence for accurate results using advanced technology, such as natural language processing and clinical analytics,” said Shroff.

Piper said some payers have already adapted its systems and staffing to improve risk adjustment payment compliance.

“Financially, risk adjustment plays a critical role in how plans are paid. This will only increase if CMS moves forward to improve the risk adjustment methodology to increase its accuracy and to better adjust for socioeconomic factors that heavily influence patient complexity and utilization,” he said.

Piper offers a few suggestions to payers involved in Medicare Advantage. Payers need to work closely with the CMS to work out technical issues and have the federal government agency understand how the plans operate and how federal guidance impacts the plans.

Piper said payers need to collaborate with providers to improve “the completeness and accuracy of their claims and encounter data and underlying medical records, including full use of electronic health records.”

MA plans should also consider using “red teams” to test their management and controls, look for compliance weaknesses and identify policies, systems, incentives and even cultural factors that may unintentionally encourage gaming or create risks, said Piper.

“Part of this, frankly, is having a multi-disciplinary team of in-house and outside experts — white hats — thinking about risks and vulnerabilities and then closing them,” he said.

Improving education and training and removing corporate silos, as well as hiring regulatory experts can also help payers, said Piper.

“A surprising number of companies that do business with Medicare or Medicaid have few, if any, board members with real-world government experience or policy expertise. Companies need to bring that talent in at the board level, just as they do at management levels,” he said.