Health Plan Weekly

Since last summer, major health insurers’ reports of unusually high outpatient care utilization have proven to be a thorn in the industry’s side — inflating medical loss ratios and forcing Humana Inc. to significantly downgrade its 2024 earnings outlook. And according to some Wall Street analysts, the trend isn’t likely to go anywhere soon. 

With the COVID-19 pandemic winding down, “grandma has been locked in her house for the last three years; she’s ready to go on a cruise and she wants that new hip, she needs that new knee,” Deutsche Bank Managing Director George Hill said during the annual Wall Street Goes to Washington Roundtable on April 8, hosted by the Brookings Institution. That increased demand, he said, “has resulted in a surge in outpatient orthopedic procedures that we’ve seen, particularly among seniors, particularly impacting the Medicare Advantage books of business.” 

Medicaid managed care organizations’ compliance with mental health parity laws and regulations varies widely by state, according to an HHS Office of Inspector General (OIG) report and industry experts. The wide range and, in some cases, widespread noncompliance with parity laws will be the subject of possible new regulations in Medicaid managed care. 

The OIG report is an early sign that the Biden administration intends to train its sights on state Medicaid agencies and their MCOs’ mental health parity compliance, which would follow several years of heightened scrutiny on commercial plans’ compliance with mental health and substance use disorder (SUD) parity rules. MCOs and states may squirm when they start their time in the hot seat: OIG found that in eight studied states, “states and their MCOs did not conduct required parity analyses…and all eight states may not have ensured that all services were delivered to MCO enrollees in compliance with [mental health]/SUD parity requirements.” OIG also pointed a finger at CMS, blaming the agency for not scrutinizing states’ enforcement of parity rules. 

As artificial intelligence software proliferates in the health care sector, a good deal of attention has focused on the ways that AI could make existing health disparities worse. Experts say that AI also has the potential to mitigate or reverse health disparities — so long as health care organizations, and insurers in particular, proactively and continuously counter biases in their current and future software platforms. 

“We’re at this inflection point where we have new tools. We have new technology that actually may have that opportunity to address health inequality in a way we haven’t been able to before. But we’re at this inflection point where that same tool can actually amplify that bias, amplify the inequality that already exists,” said Maia Hightower, M.D., during a March 26 panel organized by the National Institute for Health Care Management (NIHCM) Foundation. 

Sending informational emails helped lead to some California residents switching to superior Affordable Care Act exchange plans, according to a study published on March 29 in JAMA Health Forum. However, Marina Lovchikova, Ph.D., the trial’s lead author, points out that the vast majority of households remained in their original plans and the impact on health care utilization was minimal. This suggests that more can be done to make sure enrollees are fully aware of their options and eligibility for more generous plans, she tells AIS Health, a division of MMIT. 

Lovchikova, a senior researcher at Covered California, says the state’s exchange is “trying to get people to the coverage that could be most affordable for them and increase the access for their coverage. Some methods the state employs are sending emails or doing other low-cost, so-called nudges, which attempt to inform residents of their options but not automatically enroll them in another plan without their consent.