Covered California Enrollee Fights Blue Shield Plan to Limit Out-of-State Care

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Source: Insurancenewsnet.com

Jan. 02–Blue Shield of California is unfairly targeting hundreds of thousands of Covered California enrollees with a coverage change that would prevent them from getting routine care when they are working outside of California, one enrollee told The Sacramento Bee.

Philip Martin has been trying to get Blue Shield to reverse its decision to limit out-of-state medical coverage for PPO members whose policies didn’t go into effect before Jan. 1, 2014, the date when coverage under the Affordable Care Act went into effect. Blue Shield is limiting out-of-state coverage to urgent care, emergency care or follow-up related to those events.

“They are specifically discriminating against this demographic for more profit,” Martin said, “not even allowing people who have been with them since the beginning to be grandfathered in.”

Roughly 360,000 Covered California enrollees were covered through the Blue Shield PPO by mid-2018, according agency spokesman James Scullary, and about 6,000 of those enrollees had sought out-of-state medical care.

Given that the Blue Shield provisions are changing, Scullary urged Martin and other Covered California enrollees who need a plan offering routine care outside of California to study all the insurer networks because some plans have physicians in other states. Open enrollment continues in Californiathrough Jan. 15.

Martin, a 32-year-old Laguna Nigel resident, said he works regularly in California, New York and Florida, and his sister goes to college out of state. They both have routine care needs that can’t always wait until they are in California, he said.

“I have relationships with primary care physicians in New York and Los Angeles,” Martin said. “I’ve had specialists that I’ve been working on knee issues that I’ve had. I have an orthopedic surgeon and an acupuncturist who have helped with some of those injuries. Also, I have a therapist in New York, one in Florida and one in L.A. that I work with when I’m back there. And, then also, I have chiropractor needs because my work is very demanding with clients. I work out a lot with them. They want to work out with me. We do a lot of physical activity.”

Martin said that he called Blue Shield customer service to discuss his care needs, and the representative suggested he come back to California for appointments with medical professionals. He does not make enough money with his work to make such trips cost-effective.

“I work as a recovery coach. I work with people who have addiction issues and mental illness issues, usually diagnosed as bipolar or alcohol addiction or meth and depression,” he said. “For me, sometimes I can get a case in another state for two months. Basically, I am with that client 24/7, or I’m with that client 12 hours out of the day to help them with their 12-step program or help them start a job.”

The coverage change is also alarming for Martin’s sister, who is a student at New York University but covered under their mother’s Blue Shield PPO plan, he said.

Martin said he enrolled in Covered California prior to the Jan. 1 date, but coverage didn’t start until that date. He appealed the coverage change with Blue Shield and shared the response letter with The Bee. It read: “This change is being made to help us fulfill our goal of keeping coverage costs down for all PPO members.”

In a statement emailed to The Bee, Blue Shield said that its PPO would cover only non-emergency care that receives prior authorization and suggested members contact Blue Shield customer service with questions.

Martin shared a letter from Blue Shield that lists non-emergency services that it will cover without prior authorization. They are CAT and MRI scans, and mental health outpatient services.

Martin said he also filed a complaint with the California Department of Managed Health Care, but a department spokesperson told The Bee that state legislation does not require plans to provide non-emergency or non-urgent services outside the state of California, so the DMHC does not have any jurisdiction in the matter.

What Happens When You Let Employees Design Their Benefits Package?

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Source: Benefits Pro

As employers struggle to craft benefit packages that appeal to the broadest number of workers, a recent case study proposes a radical solution: let employees figure it out through a game.

The case study was developed by Janet McNichol, the director of human resources at the American Speech-Hearing-Language Association (ASHA) in an effort to craft a new health plan.

Workers were split up into small groups to discuss what types of care they valued most and least as well as what they were willing to spend. Guiding their discussion was a game board including 12 categories of health care (maternity, mental, primary care, etc.) along with different levels of service (good, better, best).

Related: 10 industries with the best benefits packages

They were also provided “markers” that served as currency. To provide “best” level coverage in all 12 categories would require 72 markers, but the participants were only provided 55, forcing them to make decisions about which type of care they valued most.

The employees were first asked to design a health plan for themselves, based on what they desired most in terms of care. Next, they were put into a group of 12 to 24 people and asked to develop a consensus on the best health plan for the group.

Comparing the individual plans to the group plans, it’s clear that many employees were willing to reduce a benefit that they valued personally in order to boost a benefit that is critical to their colleagues. For instance, while many employees prioritized vision care in their individual plans, all of the group plans assigned vision care the lowest value. Similarly, while roughly half of individuals said they only wanted “good” maternity care, the great majority of group plans decided on providing “better” maternity care.

Surveys taken after the activity show that 91 percent of employees were satisfied with the individual plan they created and 82 percent were happy with the plan crafted by the group. About half said they would be willing to spend more per month—$38 on average—to enhance their benefits.

“This analysis provides an empirical example of an employer successfully engaging its employees in a discussion of both population-level and coverage-level tradeoffs,” wrote McNichol and her co-authors in Health Affairs. “This type of consultative and deliberative process, appropriately modified for different circumstances and beneficiary groups, could be useful for broader discussion of health care spending tradeoffs.”

New Payment Model Tackles ‘Surprise Medical Bill’ Issue

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Source: Capital Public Radio

Even when patients go out of their way to find hospitals and labs in their insurance network, they might end up getting treated by an out-of-network specialist.

When this happens, patients are often slapped with what consumer groups call a “surprise medical bill”, meaning they’re forced to pay the out-of-network rate. In 2017, California Assembly Bill 72 banned this type of billing for patients receiving non-emergency treatment at an in-network facility.

But until now, there was uncertainty about how doctors are compensated for these services. As of Jan. 1, the state has finalized the reimbursement rate plans must pay providers.

“[Surprise billing] put the patient in the middle of the health insurer and the physician,” said outgoing insurance commissioner Dave Jones. “That law directed there be a payment rate established, so this regulation does exactly that.”

Under AB 72, plans must either pay providers 125 percent of the Medicare rate or an “average contracted rate”, which the state was required to set by Jan. 1, 2019. Before the adoption of the new system, plans had been using an interim rate.

The new payment system is based on commercial rates paid by health insurers for similar medical services in the same geographic area, adjusted for inflation.

Patients all over the U.S. have reported surprise medical bills that put them on the verge of bankruptcy. A 2015 survey from Consumers Union found that about a quarter of Californians with private insurance were charged an out-of-network rate when they thought their provider was in-network.

AB 72 initially faced pushback from groups such as the California Society of Anesthesiologists, who worried it might lead health plans to narrow their provider networks.

Vanessa Cajina, a legislative advocate for the group, said coming up with a defined payment structure was crucial. She said creating “fair payment plans” between providers and insurers keeps patients out of those disputes.

“[That] gives patients the peace of mind that when they schedule a procedure, they’re not on the hook for anything more than what their health plan told them,” she said.

A representative from the California Association of Health Plans was not available for comment.

The law applies to patients with individual or group insurance regulated by Department of Managed Health Care or the Department of Insurance. It does not affect patients enrolled in Medicare, Medi-Cal, out-of-state plans, self-insured employer plans or other products regulated by federal law.

Judge Adds New Hurdle to CVS-Aetna Merger

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Source: The Hill

A federal judge could throw a wrench into the mega-merger between health giants CVS and Aetna.

U.S. District Court Judge Richard Leon in Washington said this week he is considering delaying the $70 billion merger, and keeping the companies separate until he has a chance to weigh in.

The move is unprecedented, as the companies were already in the process of integrating after their deal formally closed last week.

The Justice Department approved the merger in October under the condition that the companies sell Aetna’s Medicare drug business to preserve competition, and every state has also signed off on the merger.

It’s not clear whether Leon, a George W. Bush appointee, can legally stop the merger. He ordered a hearing for Dec. 18 and told the companies to present arguments by Dec. 14 to convince him why they should be allowed to proceed.

“At this stage, I am less convinced of the sufficiency of the government’s negotiated remedy than the government is,” Leon wrote in the order.

A spokesman said CVS and Aetna are no longer two separate entities and is focused on their merger.

“CVS Health and Aetna are one company, and our focus is on transforming the consumer health experience,” the spokesman said.

Leon during the hearing said he was concerned that the Department of Justice (DOJ) hadn’t adequately addressed the potential competitive harms raised by the merger, according to reports.

He cited opposition from groups including the American Medical Association (AMA), which urged federal regulators to block the deal because of anticompetitive concerns.

According to the AMA, the merger “would likely substantially lessen competition in many health care markets, to the detriment of patients.”

The deal between one of the country’s largest insurers and one of the largest pharmacy benefit managers was a year in the making. The companies have touted the merger, saying it will usher in a new era of reduced costs to patients.

Leon is no stranger to major antitrust cases. In June, he issued an opinion blasting the government’s challenge to the AT&T merger with Time Warner and allowed the $85 billion deal to proceed. That ruling is currently being appealed by the government.

Antitrust experts said it’s unheard of for a federal judge to force companies to make substantial changes to a merger, even if the judge has some authority to question a federal settlement.

Federal courts have to oversee DOJ approvals under a law called the Tunney Act. The courts must decide whether the proposed settlement is in the public interest and not the result of a backroom deal. Up until now, the court reviews have been perfunctory, and mergers have been approved.

“We’re in a wonderful, uncharted land,” said David Balto, an attorney who works with consumer groups to fight large health-care mergers. “You haven’t ever had a judge say, ‘you can’t consummate this merger until you resolve the issues.’ ”

James Tierney, a former Justice Department antitrust lawyer now practicing with the law firm Orrick, said only the DOJ has the power to block the merger.

Since the agency approved the merger, Tierney said Leon can only decide if the proposed settlement addresses the harms the government identified.

“It is not the proper function of the court to make enforcement decisions. The court is free to review actions, but they can’t order the executive branch to take action it doesn’t want to take,” Tierney said.

Leon’s questioning though is being hailed by critics of the deal and could open the door for more scrutiny of major health-care mergers.

In Congress, Democrats have raised the alarm over the merger since it was announced.

Earlier this year, Rep. Jerrold Nadler (D-N.Y.), the likely incoming chairman of the House Judiciary Committee, called on antitrust officials to closely scrutinize the CVS-Aetna merger.

“The health-care sector is already highly concentrated, and there remains a concern that dominant firms — including a post-merger CVS-Aetna — would have the ability and the incentive to exclude competitors or to diminish competition,” Nadler said at a hearing on the merger earlier this year.

And with Democrats taking control of the House in January, they are likely to draw more attention to what they see as an increasing number of anticompetitive health-care mergers

For now, all eyes are on Leon.

The Justice Department in a status report Sunday said Leon’s role was limited to making sure the final settlement fixed the specific antitrust violations that spurred an initial government lawsuit.

The DOJ also said Leon already signed a preliminary order that effectively allowed the companies to move forward on their merger.

Tierney said Leon seems to have been caught off guard that the companies already closed the deal “and is apparently having second thoughts.”

Leon reportedly told lawyers for the companies last week he wouldn’t be a “rubber stamp” for the settlement.

Balto said Leon’s move could be the start of a new level of scrutiny over mergers.

“The time of DOJ asking for a rubber stamp is a bygone era disappearing,” Balto said. “We will see more courts doing this.”

Blue Shield’s Trims To Out-Of-State Coverage Give Some Californians The Blues

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Source: California Healthline

Denise Roberts is still coping with complications from a life-threatening bout of Valley Fever three years ago that claimed part of a lung. Roberts, who lives in Doyle, Calif., a tiny rural community near the Nevada border, typically drives to Reno for the care she needs. Specialists in her own state, she said, are too far away.

But starting Jan. 1, Roberts’ insurer, Blue Shield of California, likely won’t cover the out-of-state care Roberts has come to rely on.

In an effort to reduce costs, the insurer has quietly decided to scale back participation in the national Blue Card program that since 1994 has allowed Blue Shield’s members to receive a range of primary and specialty care services out of state. That could be a big problem for frequent travelers, college students, snowbirds and other people who divide their time between states – and for rural patients like Roberts who live close to state borders.

The change applies only to members with individual market preferred provider health plans,- not those with group coverage or Medicare. The restrictions appear to be confined to California.

Susan Edwards, a longtime insurance broker in the northeastern town of Susanville, Calif., described Blue Shield’s new restrictions as “a huge deal. We’re in a border county, we’re very rural, so when we need medical care we go to Reno. That’s where the specialists are. That’s where the bigger hospitals are.”

Blue Shield of California – the third largest insurer in the state – covers about 720,000 people in individual PPO plans, according to the state’s Department of Managed Health Care. Nearly a fifth are in the state’s insurance marketplace, Covered California. It’s impossible to know how many will be affected by the change.

“I now stand to lose either my coverage or my doctors when I have to renew this year,” said Roberts, 61, editor of a trade publication. “Tough choice to make when you’re held hostage by the insurance industry.”

Blue Shield of California downplayed the new restrictions. The insurer still will cover out-of-state emergency care, urgent care and some limited primary care, company officials said. It also will work with patients already undergoing a course of treatment in another state, and offer members the opportunity for telephone consultations with out-of-state doctors, spokeswoman Amanda Wardell said.

“We have a large network of providers in California,” Wardell said. “We’re trying to focus on affordability and part of that is focusing on our provider network in California. We’re able to manage our costs better.”

Kevin Knauss, a Sacramento-area health insurance agent who writes the InsureMeKevin blog, said he’s received calls from worried clients, including a man who divides his time between New York and California and a family that had hoped to seek highly specialized care outside California for their son’s brain disease.

The move isn’t particularly surprising to Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms.

In California’s competitive insurance market, she said, insurers are narrowing their networks of doctors and hospitals to lower their costs.

“Consumers are price-sensitive to premiums,” Corlette said. Under the ACA, “there is a more limited set of tools for insurers to lower premiums. They can’t discriminate against people based on their health status.”

Roberts, the Doyle resident, said that if she can’t get care in Reno – a roughly 45-minute drive from her home – she’ll have to travel through the Plumas Forest to Quincy, Calif., which takes nearly twice as long.

Roberts said she considered changing to Anthem Blue Cross, which still allows members access to out-of-state care through the Blue Card program. But she recalled having difficulties obtaining the care she needed when she was an Anthem client in the past.

“As a result, I’ve chosen to stay with Blue Shield and let the chips fall where they may,” she said.

Roberts’ health problems are significant: She nearly died from Valley Fever and had part of her left lung removed. She also suffers from heart disease, asthma, allergies and chronic obstructive pulmonary disease.

Dena Mendelsohn, a San Francisco-based senior attorney for Consumers Union, said all insurers need to ensure that their members – including rural residents – have timely access to both primary care and specialty doctors.

No law forces insurers to provide non-emergency care outside their regions, Mendelsohn said, but if Blue Shield is “lemon-dropping” – trying to get costlier members to drop their coverage – “it would be problematic.”

“It’s really important for consumers to really shop around and understand their options during open enrollment season,” which ends in California on Jan. 15, Mendelsohn said.

In Health Insurance Wastelands, Rosier Options Crop Up For 2019

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Source: Kaiser Health News

In recent years, places such as Memphis and Phoenix had withered into health insurance wastelands as insurers fled and premiums skyrocketed in the insurance marketplaces set up by the Affordable Care Act. But today, as in many parts of the country, these two cities are experiencing something unprecedented: Premiums are sinking and choices are sprouting.

In the newly competitive market in Memphis, the cheapest midlevel “silver” plan for next year will cost $498 a month for a 40-year-old, a 17 percent decrease. Four insurers are selling policies in Phoenix, which then-presidential candidate Donald Trump highlighted in 2016 as proof of “the madness of Obamacare” as all but one insurer left the region.

Janice Johnson, a 63-year-old retiree in Arizona’s Maricopa County, which includes Phoenix, said her premium for a high-deductible bronze plan will be $207 instead of $270 because she is switching carriers.

“When you’re on a fixed income, that makes a difference,” said Johnson, who receives a government subsidy to help cover her premium. “I’ll know more than a year from now if I’m going to stick with this company, but I’m going to give them a chance, and I’m pretty excited by that.”

Across all 50 states, premiums for the average “benchmark” silver plan, which the government uses to set subsidies, are dropping nearly 1 percent. And more than half of the counties that use the federal healthcare.gov exchange are experiencing an average 10 percent price decrease for their cheapest plan.

In most places, the declines are not enough to erase the price hikes that have accrued since the creation in 2014 of the health care exchanges for people who don’t get insurance through an employer or the government.

Instead, experts said, next year’s price cuts help to correct the huge increases that jittery insurers set for 2018 plans to protect themselves from anticipated Republican assaults on the markets. Although Congress came up one vote shy of repealing the law, Trump and Republicans in Congress did strip away structural underpinnings that pushed customers to buy plans and helped insurers pay for some of their low-income customers’ copayments and deductibles. Insurers responded with 32 percent average increases.

“Insurers overshot last year,” said Chris Sloan, a director at Avalere, a health care consulting company in Washington, D.C. “We are nowhere close to erasing that increase. This is still a really expensive market with poor benefits when it comes to deductibles and cost.”

For 2019, the average benchmark silver premium will be 75 percent higher than it was in 2014, according to data from the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)

When Republicans failed to kill the health law last year, they inadvertently may have made it stronger. Insurers banked hefty profits this year, and new companies are moving in.

All these factors were especially influential in Tennessee, where the average benchmark premium is dropping 26 percent, according to a government analysis. That is more than in any other state.

In 2018, 78 of 95 Tennessee counties had just one insurer. That monopoly allowed the insurer to set the prices of its plans without fear of competition, said David Anderson, a researcher at the Duke-Margolis Center for Health Policy in Durham, N.C. “They were massively overpriced,” he said.

But for the coming year, 49 Tennessee counties will have more than one insurer, with a few — like Shelby County, where Memphis is located — having four companies competing. There, Cigna dropped the price of its lowest-cost silver plan by 15 percent. Nonetheless, it was underbid by Ambetter of Tennessee, which is owned by the managed-care insurer Centene Corp.

“We’re finally at the point where the market is stabilized,” said Bobby Huffaker, the CEO of American Exchange, an insurance brokerage firm based in Tennessee. “From the beginning, every underwriter, and the people who were the architects, they knew it would take several years for the market to mature.”

Still, the cheapest Memphis silver premium is nearly three times what it was in 2014, the first year of the marketplaces. A family of four with 40-year-old parents will be paying $19,119 for all of next year unless they qualify for a government subsidy.

“The unsubsidized are leaving,” said Sabrina Corlette, a professor at Georgetown University’s Health Policy Institute. “They are finding these premiums unaffordable.”

The landscape in Phoenix is greatly improved from when Trump visited after the federal government announced a 116 percent premium increase for 2017, as the number of insurers dropped from eight to one.

But now, three new insurers are entering Maricopa County. Ambetter, the only insurer this year, dropped its lowest price for a silver plan for next year by 12 percent and still offers the cheapest such plan.

Ambetter’s plan is still 114 percent above the least expensive silver plan in the first year of the exchanges. And none of the insurers are offering as broad and flexible a choice of doctors and hospitals as consumers had back then, said Michael Malasnik, a local broker.

Since the start of the exchanges, he said, insurers have “raised their rates by multiples, and they’ve figured out you have to be a very narrow network.”

Each plan for 2019 contains trade-offs. He said only Bright Health’s plan includes Phoenix Children’s Hospital. Ambetter’s plan includes the most popular hospital and doctor groups, but they are not as conveniently located for people living in the southeastern corner of the county, making other insurers’ plans appealing.

“Geography is the name of the game this year,” Malasnik said.

Theresa Flood, a preschool teacher who lives outside Phoenix, said none of the plans she considered accepted her doctors, who include a specialist for her spine problems — she has had four surgeries — and a neurologist who monitors a cyst and benign tumor in her brain.

“I have to establish care with a whole new spine doctor and establish care with a whole new neurologist if I want to follow up on these things,” Flood, 59, said. “You’re going from established care to who in the heck am I going to see?”

The plan she chose would have been too expensive except that she and her husband, John, a pastor, qualified for a $1,263-a-month subsidy that will drop the cost to $207 a month. That bronze plan from Ambetter carries a $6,550-per-person deductible, so she expects she’ll still have to pay for her doctors on her own unless she needs extensive medical attention.

“It’s gone from being able to have a plan that you could sort of afford and got some benefit from, to putting up with what you can afford and hoping nothing happens that you actually have to use your insurance,” she said. “At this point, I’ll take what I can get.”

Trump Administration Invites Health Care Industry to Help Rewrite Ban on Kickbacks

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Source: New York Times

The Trump administration has labored zealously to cut federal regulations, but its latest move has still astonished some experts on health care: It has asked for recommendations to relax rules that prohibit kickbacks and other payments intended to influence care for people on Medicare or Medicaid.

The goal is to open pathways for doctors and hospitals to work together to improve care and save money. The challenge will be to accomplish that without also increasing the risk of fraud.

With its request for advice, the administration has touched off a lobbying frenzy. Health care providers of all types are urging officials to waive or roll back the requirements of federal fraud and abuse laws so they can join forces and coordinate care, sharing cost reductions and profits in ways that would not otherwise be allowed.

From hundreds of letters sent to the government by health care executives and lobbyists in the last few weeks, some themes emerge: Federal laws prevent insurers from rewarding Medicare patients who lose weight or take medicines as prescribed. And they create legal risks for any arrangement in which a hospital pays a bonus to doctors for cutting costs or achieving clinical goals.

The existing rules are aimed at preventing improper influence over choices of doctors, hospitals and prescription drugs for Medicare and Medicaid beneficiaries. The two programs cover more than 100 million Americans and account for more than one-third of all health spending, so even small changes in law enforcement priorities can have big implications.

Federal health officials are reviewing the proposals for what they call a “regulatory sprint to coordinated care” even as the Justice Department and other law enforcement agencies crack down on health care fraud, continually exposing schemes to bilk government health programs.

“The administration is inviting companies in the health care industry to write a ‘get out of jail free card’ for themselves, which they can use if they are investigated or prosecuted,” said James J. Pepper, a lawyer outside Philadelphia who has represented many whistle-blowers in the industry.

Federal laws make it a crime to offer or pay any “remuneration” in return for the referral of Medicare or Medicaid patients, and they limit doctors’ ability to refer patients to medical businesses in which the doctors have a financial interest, a practice known as self-referral.

These laws “impose undue burdens on physicians and serve as obstacles to coordinated care,” said Dr. James L. Madara, the chief executive of the American Medical Association. The laws, he said, were enacted decades ago “in a fee-for-service world that paid for services on a piecemeal basis.”

Melinda R. Hatton, senior vice president and general counsel of the American Hospital Association, said the laws stifle “many innocuous or beneficial arrangements” that could provide patients with better care at lower cost.

Hospitals often say they want to reward doctors who meet certain goals for improving the health of patients, reducing the length of hospital stays and preventing readmissions. But federal courts have held that the anti-kickback statute can be violated if even one purpose of the remuneration is to induce referrals or generate business for the hospital.

The premise of the kickback and self-referral laws is that health care providers should make medical decisions based on the needs of patients, not on the financial interests of doctors or other providers.

Health care providers can be fined if they offer financial incentives to Medicare or Medicaid patients to use their services or products. Drug companies have been found to violate the law when they give kickbacks to pharmacies in return for recommending their drugs to patients. Hospitals can also be fined if they make payments to a doctor “as an inducement to reduce or limit services” provided to a Medicare or Medicaid beneficiary.

Doctors, hospitals and drug companies are urging the Trump administration to provide broad legal protection — a “safe harbor” — for arrangements that promote coordinated, “value-based care.” In soliciting advice, the Trump administration said it wanted to hear about the possible need for “a new exception to the physician self-referral law” and “exceptions to the definition of remuneration.”

Almost every week the Justice Department files another case against health care providers. Many of the cases were brought to the government’s attention by people who say they saw the bad behavior while working in the industry.

“Good providers can work within the existing rules,” said Joel M. Androphy, a Houston lawyer who has handled many health care fraud cases. “The only people I ever hear complaining are people who got caught cheating or are trying to take advantage of the system. It would be disgraceful to change the rules to appease the violators.”

But the laws are complex, and the stakes are high. A health care provider who violates the anti-kickback or self-referral law may face business-crippling fines under the False Claims Act and can be excluded from Medicare and Medicaid, a penalty tantamount to a professional death sentence for some providers.

Federal law generally prevents insurers and health care providers from offering free or discounted goods and services to Medicare and Medicaid patients if the gifts are likely to influence a patient’s choice of a particular provider. Hospital executives say the law creates potential problems when they want to offer social services, free meals, transportation vouchers or housing assistance to patients in the community.

Likewise, drug companies say they want to provide financial assistance to Medicare patients who cannot afford their share of the bill for expensive medicines.

AstraZeneca, the drug company, said that older Americans with drug coverage under Part D of Medicare “often face prohibitively high cost-sharing amounts for their medicines,” but that drug manufacturers cannot help them pay these costs. For this reason, it said, the government should provide legal protection for arrangements that link the cost of a drug to its value for patients.

Even as health care providers complain about the broad reach of the anti-kickback statute, the Justice Department is aggressively pursuing violations.

A Texas hospital administrator was convicted in October for his role in submitting false claims to Medicare for the treatment of people with severe mental illness. Evidence at the trial showed that he and others had paid kickbacks to “patient recruiters” who sent Medicare patients to the hospital.

The owner of a Florida pharmacy pleaded guilty last month for his role in a scheme to pay kickbacks to Medicare beneficiaries in exchange for their promise to fill prescriptions at his pharmacy.

The Justice Department in April accused Insys Therapeutics of paying kickbacks to induce doctors to prescribe its powerful opioid painkiller for their patients. The company said in August that it had reached an agreement in principle to settle the case by paying the government $150 million.

The line between patient assistance and marketing tactics is sometimes vague.

This month, the inspector general of the Department of Health and Human Services refused to approve a proposal by a drug company to give hospitals free vials of an expensive drug to treat a disorder that causes seizures in young children. The inspector general said this arrangement could encourage doctors to continue prescribing the drug for patients outside the hospital, driving up costs for consumers, Medicare, Medicaid and commercial insurance.

Medicare Advantage Riding High As New Insurers Flock To Sell To Seniors

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Source: Kaiser Health News

Health care experts widely expected the Affordable Care Act to hobble Medicare Advantage, the government-funded private health plans that millions of seniors have chosen as an alternative to original Medicare.

To pay for expanding coverage to the uninsured, the 2010 law cut billions of dollars in federal payments to the plans. Government budget analysts predicted that would lead to a sharp drop in enrollment as insurers reduced benefits, exited states or left the business altogether.

But the dire projections proved wrong.

Since 2010, enrollment in Medicare Advantage has doubled to more than 20 million enrollees, growing from a quarter of Medicare beneficiaries to more than a third.

“The Affordable Care Act did not kill Medicare Advantage, and the program looks poised to continue to grow quite rapidly,” said Bill Frack, managing director with L.E.K. Consulting, which advises health companies.

And as beneficiaries get set to shop for plans during open enrollment — which runs from Monday through Dec. 7 — they will find a greater choice of insurers.

Fourteen new companies have begun selling Medicare Advantage plans for 2019, several more than a typical year, according to a report out Monday from the Kaiser Family Foundation. (KHN is an editorially independent part of the foundation.)

Overall, Medicare beneficiaries can choose from about 3,700 plans for 2019, or 600 more than this year, according to the federal government’s Centers for Medicare & Medicaid Services.

CMS expects Medicare Advantage enrollment to jump to nearly 23 million people in 2019, a 12 percent increase. Enrollees shopping for new plans this fall will likely find lower or no premiums and improved benefits, CMS officials say.

With about 10,000 baby boomers aging into Medicare range each day, the general view of the insurance industry, said Robert Berenson, a Medicare expert with the nonpartisan Urban Institute, “is that their future is Medicare and it’s crazy not to pursue Medicare enrollees more actively.”

Bright Health, Clover Health and Devoted Health, all for-profit companies, began offering Medicare Advantage plans for 2018 or will do so for 2019.

Mutual of Omaha, a company owned by its policyholders, is also moving into Medicare Advantage for the first time in two decades, providing plans in San Antonio and Cincinnati.

Some nonprofit hospitals are offering Medicare plans for the first time too, such as the BayCare Health system in the Tampa, Fla., area.

While Medicare beneficiaries in most counties have a choice of several plans, enrollment for years had been consolidated into several for-profit companies, primarily UnitedHealthcare, Humana and Aetna, which have accumulated just under half the national enrollment.

These insurance giants are also expanding into new markets for next year. Humana in 2019 will offer its Medicare HMO in 97 new counties in 14 states. UnitedHealthcare is moving into 130 new counties in 13 states, including for the first time Minnesota, its headquarters for the past four decades.

Extra Benefits

Seniors have long been attracted to Advantage plans because they often include benefits not available with government-run Medicare, such as vision and dental coverage. Many private plans save seniors money because their premiums, deductibles and other patient cost sharing are lower than what beneficiaries pay with original Medicare. But there is a trade-off: The private plans usually require seniors to use a restricted network of doctors and hospitals.

The federal government pays the plans to provide coverage for beneficiaries. When drafting the ACA, Democratic lawmakers targeted the Medicare Advantage plans because studies had shown that enrollees in the private plans cost the government 14 percent more than people in the original program.

Medicare plans weathered the billions in funding cuts in part by qualifying for new federal bonus payments available to those that score a “4” or better on a five-notch scale of quality and customer satisfaction.

Health plans also gained extra revenue by identifying illnesses and health risks of members that would entitle the companies to federal “risk-adjustment” payments. That has provided hundreds of billions in extra dollars to Medicare plans, though congressional analysts and federal investigators have raised concerns about insurers exaggerating how sick their members are.

study last year found that those risk adjustments could add more than $200 billion to the cost of Medicare Advantage plans in the next decade, despite no change in enrollees’ health.

For-profit Medicare Advantage insurers made a 5 percent profit margin in 2016 — twice the average of Medicare plans overall, according to the Medicare Payment Advisory Commission, which reports to Congress. That’s slightly better than the health insurance industry’s overall 4 percent margin reported by Standard & Poor’s.

Those profit margins could expand. The Trump administration boosted payments to Medicare Advantage plans by 3.4 percent for 2019, 0.45 percentage points higher than the 2018 increase.

Betsy Seals, chief consulting officer for Gorman Health Group, a Washington company that advises Medicare Advantage plans, said many health plans hesitated to enter that market or expand after President Donald Trump was elected because they weren’t sure the new administration would support the program. But such concerns were erased with the announcement on 2019 reimbursement rates.

“The administration’s support of the Medicare Advantage program is clear,” Seals said. “We have seen the downstream impact of this support with new entrants to the market — a trend we expect to see continue.”

Getting Consumers To Switch

Since the 1960s, Mutual of Omaha has sold Medicare Supplement policies — coverage to help beneficiaries in government-run Medicare pay the portion of costs that program doesn’t pick up. But the company only briefly entered the Medicare Advantage business once — in its home state of Nebraska in the 1990s.

“In the past 10 or 20 years it never seemed quite the right time,” said Amber Rinehart, a senior vice president for the insurer. “The main hindrance was around the political environment and funding for Medicare Advantage.”

Yet after watching Medicare Advantage enrollment soar and government funding increase, the insurer has decided now is the time to act. “We have seen a lot more stability of funding and the political tailwinds are there,” she said.

One challenge for the new insurers will be attracting members from existing companies since beneficiaries tend to stick with the same insurer for many years.

Vivek Garipalli, CEO of Clover Health, said his San Francisco-based company hopes to gain members by offering low-cost plans with a large choice of hospitals and doctors and allowing members to see specialists in its network without prior approval from their primary care doctor. The company is also focused on appealing to blacks and Hispanics who have been less likely to join Medicare Advantage.

“We see a lot of opportunity in markets where there are underserved populations,” Garipalli said.

Clover has received funding from Alphabet Inc., the parent company of Google. Clover sold Medicare plans in New Jersey last year and is expanding for 2019 into El Paso, Texas; Nashville, Tenn.; and Savannah, Ga.

Newton, Mass.-based Devoted Health is moving into Medicare Advantage with plans in South Florida and Central Florida. Minneapolis-based BrightHealth is expanding into several new markets including Phoenix, Nashville, Cincinnati and New York City.

BayCare, based in Clearwater, Fla., is offering a Medicare plan for the first time in 2019.

“We think there is enough market share to be had and we are not afraid to compete,” said Jim Beermann, vice president of insurance strategy for BayCare.

Hospitals are attracted to the Medicare business because it gives them access to more of premium dollars directed to health costs, said Frack of L.E.K. Consulting. “You control more of your destiny,” he added.

DOJ Approves $69B CVS-Aetna Merger with Part D Divestiture

Image result for DOJ Approves $69B CVS-Aetna Merger with Part D Divestiture images

Source: Fierce Healthcare

The Department of Justice (DOJ) approved a $69 billion CVS-Aetna merger on Wednesday after Aetna agreed to sell off its Part D business.

The Part D divestiture was a condition of the merger’s approval, according to the DOJ. Late last month, Aetna agreed to sell its 2.2 million Part D business to WellCare.

Antitrust regulators said the divestiture would “fully resolve the Department’s competitive concerns.” The DOJ along with attorneys general in five states filed a proposed settlement that approves the deal on the condition that Aetna sell off its Part D plans.

“Today’s settlement resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals,” Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division said in a statement. “The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the healthcare services that American consumers can obtain.”

In a complaint filed to U.S. District Court for the District of Columbia, DOJ attorneys argued that without the divestiture, the combined company would cause “anticompetitive effects, including increased prices, inferior customer service, and decreased innovation” in the 22 states where Aetna sells Part D plans. The court must approve the settlement in order for it to move forward.

“DOJ clearance is an important step toward bringing together the strengths and capabilities of our two companies to improve the consumer healthcare experience,” CVS Health President and Chief Executive Officer Larry J. Merlo said in a statement. “We are pleased to have reached an agreement with the DOJ that maintains the strategic benefits and value creation potential of our combination with Aetna. We are now working to complete the remaining state reviews.”

Part D consolidation was the primary issue raised among groups opposing the merger, including the American Medical Association and the California Insurance Commissioner.

Trump Signs New Laws Aimed at Drug Costs and Battles Democrats on Medicare

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Source: New York Times

President Trump signed bipartisan legislation on Wednesday that would free pharmacists to tell consumers when they could actually save money by paying the full cash price for prescription drugs rather than using health insurance with large co-payments, deductibles and other out-of-pocket costs.

The legislation on gag clauses has been praised by lawmakers in both parties, but the signing was nearly eclipsed on Wednesday by a separate health care furor: Mr. Trump asserted in an essay in USA Today that Democrats supporting “Medicare for All” would wreck the program for older Americans, infuriating Democrats who said he was lying to millions of Americans.

“Democrats would gut Medicare with their planned government takeover of American health care,” Mr. Trump said, and he assailed Democrats as “radical socialists.”

The back-and-forth over health care showed how prominent the issue has become in the midterm election campaigns. As the parties were coming together on prescription drug costs and fighting over Medicare, the Senate deadlocked on Wednesday over a Democratic proposal to block the expansion of cheap “short term” health insurance policies that do not have to cover maternity care or pre-existing conditions, a top priority of Mr. Trump’s.

Democrats, hoping to regain control of the Senate, had pushed for the vote to put Republicans on the record as opposing protections for people with pre-existing conditions.

“The Trump administration has expanded junk insurance plans,” said Senator Tammy Baldwin, Democrat of Wisconsin, who led the effort. “These plans are cheap for a reason. They do not have to provide essential health benefits like hospitalization, prescription drugs and maternity care.”

The agreement over ending the gag clauses showed how Congress, despite all the partisan rancor, can still get things done. Pharmacists around the country say they have often been forbidden to share information on drug pricing with customers. The restrictions, they say, have been imposed by companies that manage drug benefits for insurers and employers.

The legislation will “completely end these unjust gag clauses once and for all,” Mr. Trump said.

He signed two bills. One, introduced by Senator Susan Collins, Republican of Maine, bans gag clauses in commercial health insurance, including coverage offered by employers and plans bought by individuals and families on their own.

The other bill, introduced by Senator Debbie Stabenow, Democrat of Michigan, applies to outpatient drug coverage in Medicare, whether provided by the traditional fee-for-service program or by private Medicare Advantage plans.

“Insurance is intended to save consumers money,” Ms. Collins said. “Gag clauses do the opposite. They prevent pharmacists from telling patients how to pay the lowest possible price for their prescription drugs.”

Lawmakers were not so sanguine about the president’s attack on Democrats over Medicare. Senator Bernie Sanders of Vermont, the author of the Medicare for All plan supported by at least 15 Democratic senators and more than 100 House Democrats, said Mr. Trump’s broadside was full of falsehoods.

“Our proposal wouldn’t cut benefits for seniors,” Mr. Sanders said. “In fact, we expand benefits. Millions of seniors today cannot afford the dental care, vision care or hearing aids they desperately need. Our proposal covers them. In addition, Medicare for All would eliminate deductibles and co-pays for seniors and significantly lower the cost of prescription drugs.”

Mr. Trump and members of Congress from both parties have bewailed the high cost of many drugs. But aside from the bills signed Wednesday, Congress has not done much to address the issue this year.

Steven F. Moore, whose family owns Condo Pharmacy in Plattsburgh, N.Y., said the new federal laws would be “a big help.” The restrictions on pharmacists’ ability to discuss prices with patients are “incredibly frustrating,” he said.

The clauses force pharmacists to remain silent as, for example, consumers pay $125 under an insurance plan for an influenza drug that would have cost $100 if purchased with cash.

Representative Earl L. Carter, Republican of Georgia, also hailed approval of the legislation.

“As a pharmacist for more than 30 years, there were many times when I was prevented from telling my patients that there was a cheaper option because of a gag clause,” said Mr. Carter, known as Buddy.

Lobbyists for pharmacy benefit managers did not fight the legislation and suggested that gag clauses were dying out.

Mark Merritt, the president and chief executive of the Pharmaceutical Care Management Association, which represents drug benefit managers, said: “We don’t condone the use of gag clauses. It has occurred on rare occasions, but it’s an outlier practice that we oppose.”

Pharmacists tell a different story. They say gag clauses have been common for years. Hugh Chancy, a pharmacist who owns five community drugstores in southern Georgia, said his company had been reprimanded by a pharmacy benefit manager for telling customers when it would be cheaper to pay for medicines without using insurance.

The legislation signed Wednesday also includes a provision to combat agreements between drug makers that stifle competition by delaying the marketing of lower-cost copycat versions of expensive biotechnology medicines. Such biologic medicines account for a rapidly growing share of drug spending.

Under the new law, manufacturers of the original product and the copy, known as a biosimilar, will have to report such agreements to the Federal Trade Commission, which can challenge them as violations of antitrust laws. The agreements are known as pay-for-delay deals because the branded drug company pays a potential competitor to delay entering the market.

“These agreements are great deals for the drug companies, but bad deals for consumers,” said Representative John Sarbanes, Democrat of Maryland. Until now, he said, officials had “no way of knowing how many of these back-room deals occur between manufacturers of biologic and biosimilar drugs — new, cutting-edge drugs that are often extremely expensive.”

On a separate issue, the Senate allowed the Trump administration on Wednesday to move ahead with its plan to promote the sale of “short term” health insurance policies that do not have to provide all the benefits required by the Affordable Care Act.

Under a rule that took effect this month, it will be much easier for insurers to issue and renew such plans. The maximum duration, including any extensions, would be 36 months.

An attempt by Democrats to overturn the rule failed in the Senate on a tie vote of 50 to 50. Ms. Collins was the only Republican who voted for the resolution of disapproval.

Mr. Trump said such short-term policies would be available for “just a fraction of the cost of Obamacare — much less money.”

Last Updated 01/23/2019

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