AHIP Presses Congress, White House To Ramp Up Scrutiny Of Private Equity Provider Deals

AHIP presses Congress, White House to ramp up scrutiny of private equity  provider deals | Fierce Healthcare

Source: Fierce Healthcare, by Robert King

Health insurance trade group AHIP is calling for the White House and Congress to increase scrutiny of private equity control of providers, which the group worries could impact quality and costs.


The group earlier this week released letters sent to the White House and congressional leaders outlining parts of a new policy road map and priorities (PDF). Chief among them was more transparency surrounding private equity deals, which has grown in popularity across certain parts of the provider industry.

“While improving transparency of health care prices at the federal level has been a major focus, only the recent executive order related to nursing home care has applied to the activities of private equity entities of the health care marketplace, which have vastly different business models than other health care organizations,” the letter to President Joe Biden said.

AHIP wrote that there needs to be more transparency on private equity control of physician specialty groups and how the deals can impact quality and costs for patients.

The group noted in a white paper that back in 2018 private equity made up 45% of all health mergers and acquisitions. While initial deals applied to certain specialties like orthopedics and urology, AHIP said targets have expanded.

AHIP wants Congress to pass legislation that requires the public reporting of all private equity and hedge fund purchases of specialty groups and other providers such as emergency room physicians or ambulance providers. They also want the federal government to study any anticompetitive impact on the acquisition of providers by private equity firms.


Other key priorities in AHIP’s road map include:

  • * Advance use of site-neutral payments to ensure payments are the same no matter the site of care. The Centers for Medicare & Medicaid Services has cut Medicare payments in recent years to off-campus hospital clinics to bring the payments in line with those paid to physician clinics. But the effort led to a legal fight with the hospital industry.
  • * Support the expansion of home-based advance care via “value-based care and payment models,” the road map said.
  • * Remove barriers to telehealth access, which exploded in use since the onset of the pandemic; but, now, regulators are figuring out what to make permanent. AHIP wants the federal government to have network adequacy regulations to account for the availability of telehealth and to ban billing of “distant site facility fees for telehealth services.”

AHIP’s push to scrutinize private equity deals comes as the federal government has delivered more scrutiny of hospital merger deals. The Federal Trade Commission also launched a probe into physician practice acquisitions back in January 2021 to examine their impact on market competition.

AHIP Warns Proposed ACA Exchange Rule Could Threaten Market’s Growing Stability

AHIP warns proposed ACA exchange rule could threaten market's growing  stability | Fierce HealthcareSource: Fierce Healthcare, by Paige Minemyer

AHIP, the top lobbying organization for commercial insurers, is warning the feds that provisions in its proposed rule governing the Affordable Care Act’s exchanges for 2023 could “undermine” the growing stability there.

For instance, the group says in comments (PDF) submitted late Thursday that potential changes to requirements for essential health benefits would limit the ability for insurers to manage costs, particularly for prescription drugs, and manage chronic illnesses.

In addition, AHIP said that a proposed requirement for insurers to offer standardized plan options on the exchanges would “stifle innovation” and includes provisions that would be hard for payers to roll out, such as common drug formulary designs.


Instead, AHIP suggests that the Centers for Medicare & Medicaid Services deploy an approach in which payers are required to offer one standardized silver plan option for 2023, and then gather enrollment data to see if the plan designs are meeting consumer needs.

“The continued stability and growth of the ACA marketplaces is also due in large part to policies that have promoted a stable regulatory environment, increased competition, and enabled issuers to offer innovative products that consumers want and need,” AHIP said. “However, we are concerned that some of the policies proposed in this Payment Notice may take large steps backward, undermining this hard-won stability and significantly limiting innovation and competition.”


CMS said earlier Thursday that the final tally for ACA open enrollment was 14.5 million, a record. The market had been improving for some time, luring big-name insurers such as UnitedHealthcare and Aetna back in, but the Biden administration’s temporary expansion of premium tax credits has led enrollment to skyrocket.

In the rule, CMS also proposes mandating network adequacy reviews for plans offered on the federal exchange, Healthcare.gov.

AHIP said proposed network adequacy standards could make it harder for payers to design innovative plans, lead to higher premiums and place an undue burden on both payers and providers.

“If finalized, we recommend network adequacy standards be deferred to plan year 2024 to provide time to address these outstanding issues and allow issuers the time to change to their networks,” the group said.


The organization is urging CMS to extend the comment window on the rule to allow additional time for feedback on its proposals.

HHS to require proof of eligibility for late health plan enrollment

People who want to use HealthCare.gov to subscribe to a health insurance plan or change plans outside the open enrollment period must now prove that they are eligible, marketplace CEO Kevin Counihan said. The requirement is “a much-needed step in the right direction,” said AHIP spokeswoman Clare Krusing. The New York Times (free-article access for SmartBrief readers) (2/24)

Medigap Continues to Provide Critical Financial Protection

Medicare supplement (Medigap) insurance remains a critical source of health coverage for low-income beneficiaries, particularly those living in rural areas, according to a  report from America’s Health Insurance Plans (AHIP). Enrollment has continued to grow over the past several years with more than 11 million Medicare beneficiaries enrolled in 2014. Medigap coverage helps cover significant out-of-pocket costs that are not covered by Medicare, such as deductibles, coinsurance, and copayments. As a result, Medigap beneficiaries are overwhelmingly satisfied with their coverage, and more than 9 in 10 would recommend Medigap to a friend or relative. The follow are key findings:

  • 48% of Medicare beneficiaries without any additional insurance coverage had Medigap policies in 2013.
  • 58% of Medigap policyholders in 2013 were women, and 42% were men.
  • 45% of Medigap policyholders were 75 years or older compared to only 38% of all Medicare beneficiaries.
  • 46% of rural Medigap policyholders and 39% of all Medigap enrollees had annual incomes below $30,000 in 2013.

CMS Undermines Medicare Advantage Chronic Care

CMS underestimates costs for people with multiple chronic conditions to the tune of  $2.6 billion annually, according to a study by Avalere. In the spring of 2015, CMS finalized changes to the risk adjustment system, targeting chronic disease prevention programs. These changes significantly limit health plans’ early intervention efforts and seniors’ benefits. Under the risk adjustment model, CMS substantially under-predicts expenditures for providing care to beneficiaries, including those with the following conditions:

  • Chronic kidney disease.
  • Osteoarthritis.
  • Rheumatoid arthritis.
  • Alzheimer’s disease and related conditions.

AHIP president and CEO Marilyn Tavenner said, “Further cuts to Medicare Advantage and seniors’ benefits are…at odds with…delivering better care and better value for beneficiaries. Rather than relying on an antiquated fee-for-service approach…, CMS should focus on strengthening Medicare Advantage and the innovative programs that improve seniors’ health.”

Last year, more than 340 members of Congress urged CMS to protect seniors’ coverage and provide stability to the program. Ahead of the upcoming February rate notice, more than 2 million seniors from AHIP’s Coalition for Medicare Choices have mobilized, urging Washington to defend the Medicare Advantage program from further payment cuts

CMS releases proposed rule on Medicaid managed care

A proposed rule would set a medical loss ratio of 85% for privately run Medicaid managed care plans, require states to establish quality rating systems for the plans and allow states flexibility in setting network advocacy standards. Plans that spend less than 85% of premium revenue on health care would not be required to rebate the difference. AHIP interim CEO Dan Durham lauded the flexibility plans would have under the law, but industry leaders criticized the inclusion of the MLR. Kaiser Health News (5/26), The Hill (5/26)

How Proposed Medicare Advantage Cuts Would Affect Enrollees

A recent Oliver Wyman report finds that CMS’ proposed changes to Medicare Advantage payments would result in a 1.2% cut in 2016. Medicare Advantage payments have already been cut by about 10% over the past two years. These cuts, combined with another payment reduction, could leave millions of seniors facing higher costs and reduced benefits — in some states as much as $120 per month on average, according to the report.

“Seniors cannot afford another cut to their Medicare Advantage coverage. Policymakers should take action to stabilize Medicare Advantage funding for the millions of beneficiaries who depend on the program,” said AHIP President and CEO Karen Ignagni.

The chart below highlights states most affected by the change in payments from 2013-2016:

New York 1,183,621 > $120
Texas 1,066,577 > $120
Louisiana 228,196 > $120
California 2,087,054 $100-$120
New Jersey 207,954 $100-$120
New Mexico 104,826 $100-$120
Hawaii 88,336 $100-$120
Utah 90,079 $100-$120
Florida 1,529,840 $80-$100
North Carolina 489,578 $80-$100

As CMS prepares to finalize payment rates for next year, a growing number of voices are asking the agency to protect seniors from any further cuts. Bipartisan majorities in Congress—including 53 senators and 239 representatives—recently sent letters urging CMS to prevent additional cuts to coverage and benefits. Final payment rates will be released on April 6, 2015.

Premiums Are Lower When There Are More Hospitals

More competitive hospital markets had more than 8% reductions in premiums. That translates into savings of more than $20 a month for consumers in markets with less hospital concentration, according to a report commissioned by America’s Health Insurance Plans (AHIP). The report, authored by Scott Thompson, Ph.D. and published in the Antitrust Health Care Chronicle, finds that hospital systems with strong market influence can often negotiate higher rates for their services. Each additional effective hospital competitor is associated with a 1.5% drop in the cost of insurance premiums. Consumers in more competitive markets, such as Los Angeles, saw average monthly savings of $32.90 in reduced premiums when compared to consumers purchasing coverage in San Francisco, a market with fewer hospital competitors.

AHIP president and CEO Karen Ignagni said, “Consumers and employers benefit from competitive markets that promote affordability and choice. More needs to be done to encourage competition among providers. Hospital consolidation comes with a price that consumers and employers simply cannot afford.”

Report: LTC policy often can pay much of care costs

Most long-term-care insurance policies, including those with somewhat diminished buying power after many years, should be able to cover the bulk of costs for home care and assisted-living stays, as well as at least half of the cost of nursing home care, according to a LifePlans report for AHIP. National Underwriter Life & Health (11/12)

HSAs Provide Financial Flexibility

Fifty-two percent of HSA account holders spent more than 80% of their HSA funds for health care expenses during 2012, according to a survey by America’s Health Insurance Plans (AHIP) and the American Bankers Assn. Since Congress authorized HSA plans in 2004, AHIP has conducted three surveys on HSA banking activity. This latest report measuring the financial activity of more than 1.4 million HSAs, shows consumers taking an active role in managing their health care dollars. Fifty-five percent of HSAs received personal contributions during 2012. While end of the year account balances varied, roughly 80% of accounts had a positive balance that could be carried over to the next year to help pay for future expenses. Fifty-eight percent of accounts had withdrawals during the year. Of those accounts, the average withdrawal during 2012 was $2,081. For more information, visit http://www.hsaalliance.org.

Last Updated 05/25/2022

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