Health Plan Weekly

The Supreme Court’s near-unanimous decision on April 27 to award health insurers $12 billion in unpaid risk corridors funding was certainly a win for the industry, but it might not be as big of a windfall for insurers as it may seem, experts tell AIS Health.

The risk corridors program was part of the Affordable Care Act’s “three Rs” — alongside risk adjustment and reinsurance — which were meant to stabilize the individual market in the law’s early years. With risk corridors, the government shares in insurers’ losses and profits, so health plans with lower-than-expected claims paid into the program while plans with higher-than-expected claims received payment.

✦ Citing the COVID-19 crisis, the Trump administration will apply a “policy of enforcement discretion to allow compliance flexibilities” regarding the interoperability rules it finalized March 9. “Now more than ever, patients need secure access to their healthcare data,” CMS Administrator Seema Verma said in an April 21 statement. “Nevertheless, in a pandemic of this magnitude, flexibility is paramount for a healthcare system under siege by COVID-19. Our action today will provide hospitals an additional 6 months to implement the new requirements.” Read more at https://bit.ly/3eJz43d.

✦ Even though the severity and duration of the COVID-19 pandemic remains highly uncertain, U.S. health insurers are likely to remain profitable, according to a report from Moody’s Investors Service released April 20. However, an emerging recession could cause lower revenues, tighter cash flows and declining commercial enrollment, Moody’s suggested. The credit rating firm said the earnings of regional commercial-focused insurers are more vulnerable than those of national, diversified companies. Read more at https://bit.ly/3cIdJFk.

Insurers that participate in the individual, small-group and large-group markets are projected to issue a record high $2.7 billion in medical loss ratio (MLR) rebates to their customers this year — nearly doubling the $1.4 billion in rebates issued last year, according to a recent Kaiser Family Foundation analysis. Almost 75% of the rebates in 2020 will come from individual market insurers. Looking ahead, the analysis notes that even if individual market insurers experience losses in 2020 due to costs related to the COVID-19 pandemic, they could still owe rebates in 2021 because MLR rebates are calculated using the last three years of insurers’ financial data. Individual market rebates were so high in 2020 primarily because insurers had strong financial performances in 2018 and 2019.

As COVID-19 spreads nationwide, insurers have dramatically cut back on in-person care management of their highest-risk chronically ill members while ramping up their capacity for remote monitoring via telehealth. This move — however necessary — likely will lead to repercussions in future months, some analysts warn.

“Face-to-face programs have stopped, as have programs run in nursing homes and other residential facilities,” Dan Mendelson, founder of Avalere Health, tells AIS Health. “Examples are in-person annual wellness visits and home visits attendant to managing complex chronic illnesses. This is appropriate right now given the crisis, but will come at a cost, in that this kind of care management adds value.”

An April 15 study published in Health Affairs found surprise billing occurred in 8% of procedures at ambulatory surgery centers (ASCs), and the average balance of each bill increased by 81% between 2014 and 2017. According to the study, bills for anesthesia administered either by physicians or certified registered nurse anesthetists (CRNAs) comprised 69% of the studied surprise bills.

Experts tell AIS Health that a very small number of anesthesiology practitioners drive most of the surprise billing and price distortion in ASCs, and only legislation can solve the problem.