Health Plan Weekly

The Blue Cross and Blue Shield Association (BCBSA) has reportedly reached a tentative settlement in a lengthy legal battle over whether its member plans engage in anticompetitive business practices. And although it may seem like a counterintuitive result for an antitrust lawsuit, the settlement’s terms will likely give Blues plans more freedom to collaborate and consolidate, industry analysts say.

The lawsuit in question was filed in 2012 on behalf of employers and policyholders who took issue with Blues plans’ agreement to divide the country among the association’s 36 members and to restrict members’ ability to offer non-Blues products. A related lawsuit filed by health care providers, which was then consolidated with the employer/policyholder lawsuit, alleged that the Blues’ anticompetitive practices improperly depressed their reimbursement. In 2018, a federal judge delivered a boost to the plaintiffs’ case by deciding that the burden of proof falls on BCBSA to prove its practices are not anticompetitive (HPW 5/7/18, p. 9) — a decision that held up on appeal later that year.

As state budgets continue to be squeezed by the COVID-19 pandemic and related economic downturn — and as health insurers report large profits due to low utilization of routine health care services — state officials are perhaps understandably eyeing Medicaid managed care organizations as sources of extra funding. But at least one health insurer isn’t happy about a tactic states are using, with CMS’s blessing, to claw back money from MCOs.

The issue in question is the use of risk corridors in MCO contracts, according to Kamran Hashim, vice president of policy and planning at Molina Healthcare, Inc. In a Sept. 16 virtual session during the America’s Health Insurance Plans (AHIP) National Conference on Medicare, Medicaid & Dual Eligibles, Hashim explained that risk corridors typically are used when there isn’t enough data to make an accurate estimate of future medical utilization or costs. To solve that, risk corridors limit an MCO’s medical expenditures to a certain range — so if actual costs come in below that, they return the difference to the state, and if the MCO’s costs are above the cap, the state absorbs the excess.

✦ The Blue Cross Blue Shield Association has signed off on a tentative agreement in a major antitrust lawsuit filed against Blues plans on behalf of customers, the Wall Street Journal reported on Sept. 24, citing people with knowledge of the matter. While the settlement has not yet been authorized by the boards of the 36 Blue Cross Blue Shield insurers or the judge presiding over the case, the WSJ reported that it would “require a payout of around $2.7 billion and curtail practices that allegedly limited competition” among Blues plans. Read more at https://on.wsj.com/3kR9Kut.

✦ In a Sept. 24 campaign speech in Charlotte, N.C., President Donald Trump touted his administration’s record on health care and unveiled an “America First Healthcare Plan.” The plan, which the is detailed in a new executive order, both details past actions the administration has taken to improve the health care system and Trump’s vision for future improvements. For example, it says that “it has been and will continue to be the policy of the United States to give Americans seeking healthcare more choice, lower costs, and better care and to ensure that Americans with pre-existing conditions can obtain the insurance of their choice at affordable rates,” though it doesn’t mention how that would be accomplished. The order also directs HHS to work with Congress to achieve a solution to the problem of surprise medical billing by Dec. 31. View the order at https://bit.ly/3mNWJ6y.

Since at least the 2017 saga when Republicans tried to repeal and replace the Affordable Care Act (ACA), one of the law’s most visible — and politically charged — components has become its protections for people with preexisting conditions. Now, with the makeup of the Supreme Court slated to shift, some experts believe those same provisions are the most at risk from being struck down alongside the law’s now-defunct individual mandate (see story, p. 1).

But that begs the question: Would health insurers actually want to go back to a pre-ACA world?

The rates that providers and laboratories charge for COVID-19 diagnostic and antibody testing — prices that “have important implications for out-of-network plans, uninsured patients, and other payers with little negotiating power” because of provisions in the CARES Act — far exceeded their Medicare reimbursement rates, according to a recent study published in the Society of General Internal Medicine. By analyzing administrative claims data from the COVID-19 Research Database, the study found that independent labs — which performed almost half of all COVID-19 diagnostic tests — charged $140.41 on average, while the Medicare rate was $51.31. Independent labs performed more than 95% of all antibody tests, with an average charge of $62.30, compared to the Medicare rate of $42.13. Across the country, average diagnostic testing fees ranged by state, from a low of $64.98 in Utah to a high of $505.65 in Washington, D.C. For antibody testing, New Mexico providers and labs charged an average of $195.41, more than four times of the average charge in New York ($45.85).