HHS Sec. Xavier Becerra is defending No Surprises Act-related regulations from growing criticism by providers and members of Congress, citing an HHS report on the cost and prevalence of surprise bills. Becerra said on Nov. 22 that providers who overcharge for services will simply have to change: “I don’t think when someone is overcharging, that it’s going to hurt the overcharger to now have to [accept] a fair price,” he told Kaiser Health News. “Those who are overcharging either have to tighten their belt and do it better, or they don’t last in the business. It’s not fair to say that we have to let someone gouge us in order for them to be in business.” The HHS report found that “surprise medical bills are relatively common among privately insured patients and can average more than $1,200 for services provided by anesthesiologists, $2,600 for surgical assistants, and $750 for childbirth-related care.” More than 150 members of Congress from both parties, many of them physicians, sent a letter to Becerra earlier this month protesting the latest rulemaking on the No Surprises Act. In addition, Texas’ largest provider organization filed suit to block the latest interim final rule.
The third quarter of 2021, to put it mildly, was a tough one for three out of the four startup health insurers that have gone public in the past year.
In particular, individual market-focused Oscar Health, Inc. and Bright Health Group, Inc. struggled with controlling medical costs despite their rising revenues. Oscar recorded a $212 million net loss — eclipsing its net loss of $79 million in the third quarter of 2020 — and a medical loss ratio (MLR) of 99.7%, while its revenues rose 336% year over year. Bright Health reported a $296 million loss (compared with a $59 million loss in the year-ago quarter) and a 103% MLR, and its revenues jumped 206%. Health insurers typically try to keep their MLRs in the mid-80% range to comply with federal regulations while also tightly managing medical costs.
The premium costs of employer-sponsored health plans increased by 4% this year, according to the Kaiser Family Foundation’s (KFF) annual Employer Health Benefits Survey. KFF analysts and health care purchasers alike say the annual growth rate in health care costs — employer plan premiums for a family have grown by 47% since 2011 and 283% since 1998, according to KFF — causes unsustainable financial strain for both employers and plan members.
KFF also identified several emerging trends in employer coverage driven by cost growth and the COVID-19 pandemic. Deductibles and other forms of member cost sharing have increased in recent years. The share of employees in high-deductible plans declined slightly in 2021, but accounted for roughly a quarter of employer enrollment, a similar figure to recent years. Employer insurance experts have mixed opinions on whether these trends will continue. Meanwhile, in response to the pandemic, firms expanded their telehealth offerings and behavioral health benefits this year.
The Biden administration — having already opted to keep Trump administration-era health care price transparency regulations on the books — has now issued a new set of transparency requirements aimed at health insurers specifically.
The interim final rule with request for comments (IFC), titled “Prescription Drug and Health Care Spending,” will require group and individual market health plans as well as Federal Employees Health Benefits Program carriers to submit a wealth of prescription drug and health care spending data to the federal government no later than Dec. 27, 2022. At least one industry analyst doesn’t anticipate the regulation will have a particularly significant effect on health insurers — though that may not stop them from protesting.
CMS repealed a proposed Trump-era regulation that would have required Medicare to cover experimental “breakthrough” medical devices that have been approved by the FDA but not cleared for Medicare use through a national coverage determination. Insurer groups opposed the rule and urged the Biden administration to revoke it, while the medical device industry’s largest trade group championed it as a breakthrough for patients.
“Although we continue to be in favor of enhancing access to new technologies, we are mindful that they may have unknown or unexpected risks and must first ensure such technologies improve health outcomes for Medicare beneficiaries. The Medicare program needs to implement policies that balance access and appropriate safeguards,” said CMS Administrator Chiquita Brooks-LaSure in a Nov. 12 press release on the decision. CMS said it will begin to develop an alternative policy to ensure speedy access to breakthrough technologies.
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