New failures are piling up among the member-run health insurance co-ops carrying out one of the Affordable Care Act’s most idealistic goals, leaving just seven remaining when the health law’s fourth enrollment season starts in the fall. There were 23 in 2014 [...] Eleven are still in business, but four in Oregon, Ohio, Connecticut and Illinois will disappear by fall due to financial insolvency. Oregon’s Health Co-Op and Connecticut’s HealthyCT were told to close by their state’s regulators last week. Tuesday, the Land of Lincoln Mutual Health Insurance Co. in Illinois was ordered to close by state regulators. For the rest — which all posted annual losses in 2015, according to the National Alliance of State Health Co-Ops — survival is job No. 1.
[Land of Lincoln policyholders] will be able to buy insurance from a different carrier to cover them for the rest of 2016, according to the state Insurance Department. But switching plans is going to cost them. The co-pays and deductibles enrollees have been paying since January will not transfer to new plans. A new plan will reset deductibles and out-of-pocket maximums paid by consumers.
A top Centers for Medicare and Medicaid Services official defended the health insurance co-ops created under the Affordable Care Act Wednesday, after four more of the nonprofit insurers announced they would take steps to wind down in recent weeks. Kevin Counihan, the CEO of HealthCare.Gov, told a subcommittee of the House Committee on Oversight and Government Reforms that the co-ops have spurred innovation within the health insurance marketplace and given consumers more opportunities.
The Obama Administration is finding out that bad policy design and markets working the way they're supposed to have predictable results:
From the Administrations' article in the Journal of the Amer Med Assn:
...although the ACA included policies to help address prescription drug costs, like more substantial Medicaid rebates and the creation of a pathway for approval of biosimilar drugs, those costs remain a concern for Americans, employers, and taxpayers alike—particularly in light of the 12% increase in prescription drug spending that occurred in 2014. In addition to administrative actions like testing new ways to pay for drugs, legislative action is needed. Congress should act on proposals like those included in my fiscal year 2017 budget to increase transparency around manufacturers’ actual production and development costs, to increase the rebates manufacturers are required to pay for drugs prescribed to certain Medicare and Medicaid beneficiaries, and to give the federal government the authority to negotiate prices for certain high-priced drugs.
A new Health Affairs study has fueled the debate over the 340B drug discount program by concluding hospitals have begun using the program to boost profits rather than help low-income and uninsured patients.
The 340B program — created by the Veterans Health Care Act of 1992 — allows nonprofit hospitals, community health centers, hemophilia treatment centers, HIV/AIDS clinics and other facilities that serve large numbers of under- or uninsured patients to buy medications from manufacturers at reduced prices. Researchers found 340B disproportionate share hospitals that registered for the program in 2004 or later served wealthier communities than hospitals that joined the discount program earlier, according to the study. Additionally, clinics affiliated with 340B hospitals that registered for the program in 2004 or later served communities with higher incomes and higher levels of insurance coverage than clinics that registered prior to 2004. These findings support allegations that hospitals participating in the program are looking to bring in extra money by targeting wealthier and/or insured patients. Hospitals participating in the 340B program aren't required to pass the discount along to patients or insurers and can subsequently turn a profit by charging the full price for medications the hospital bought at a discount—although hospital groups have vehemently denied 340B providers engage in this practice.
UnitedHealth and several other insurers have reported struggles with business sold on the ACA’s exchanges, which opened for enrollment in the fall of 2013. The exchanges delivered a customer base that generated more claims than expected initially. Companies also have been hurt by a shortfall from temporary government support programs and by high-cost patients who signed up for coverage outside regular enrollment windows.
UnitedHealth said earlier this year that it was planning drastic cutbacks in its participation in the ACA’s exchanges in 2017. The insurer had expanded rapidly into the market and sold coverage on exchanges in 34 states this year. But it only plans so far to offer policies in three next year: Nevada, Virginia and New York.
GAO report on Veterans Health Administration reimbursement procedures for outside providers:
Almost all of the community providers we interviewed (11 out of 12) and all of the state hospital association respondents that participated in our review described the administrative burden of submitting claims and medical documentation to their respective VHA claims processing locations. For example, one community provider told us that VHA claims only accounted for about five percent of their business, but the provider told us it employed one full-time staff member who was dedicated to submitting claims to VHA and following up on unpaid ones. This same provider employed a second full-time staff member to handle Medicaid claims, but these accounted for about 85 percent of the provider’s
business.
According to many of the community providers that participated in our review, obtaining payment from VHA often requires repeated submission of claims and medical documentation. Officials from one community provider we interviewed said that at one point, they had been hand delivering paper medical documentation with paper copies of the related claims to their VHA claims processing location, but VHA staff at this location still routinely rejected their claims for a lack of medical documentation [...] Community providers who participated in our review also explained that they rarely received written notifications from VHA about claims decisions.
Aetna is pulling out of all but four states where it currently sells plans on the Obamacare exchanges for 2017. The insurer’s participation will be limited to Virginia, Delaware, Iowa and Nebraska next year, compared with 15 states where it competed for customers this year. The announcement follows similar decisions by UnitedHealth Group and Humana to scale back exchange participation. Aetna cited unsustainable losses as the primary reason for trimming its Obamacare participation. The number of counties where it sells exchange plans will drop from 778 to 242.
Arizona's Pinal County, at risk of having no insurers offering exchange plans next year. Currently, the state has no insurers that have filed to offer exchange plans in the county, according to Stephen Briggs, a spokesman for Arizona's state insurance regulator; but he said the regulator is in talks with other insurers about offering exchange plans in the country.
FWIW, Pinal County is near Phoenix and has a population of 375k-- on the surface it doesn't seem like the kind of area that insurers stereotypically try to avoid.
"Liberalism is arbitrarily selective in its choice of whose dignity to champion." Adrian Vermeule
Obamacare backers are suspicious of the timing of Aetna’s decision to back out of most of the law’s insurance markets, suggesting the nation’s third largest carrier was trying to strong-arm the Obama administration into approving its controversial merger with another insurer. And a letter emerged overnight in which Aetna CEO Mark Bertolini warned the Department of Justice that the health insurer would scale back Obamacare market participation if the administration tried to block Aetna's merger with Humana. Two weeks later, DOJ sued to stop the deal.
"If the deal were challenged and/or blocked we would need to take immediate actions to mitigate public exchange and ACA small group losses," Bertolini wrote in the letter obtained by Huffington Post. He argued that Aetna needed the synergies of a successful merger to help cover its mounting costs, and that a legal fight would only worsen the company's finances.
"In other words, instead of expanding to 20 states next year, we would reduce our presence to no more than 10 states," he wrote. Aetna cut back even more than that, announcing in a blow to Obamacare Monday might that it would sell exchange plans in just four states next year, down from 15 this year. Bertolini cited unsustainable losses of $430 million since 2014. Only four months ago Bertolini was bullish on Obamacare.
A U.S. government health agency on Thursday said that it was considering new rules to prevent healthcare providers or related groups from steering patients into Obamacare individual insurance plans instead of Medicare or Medicaid in order to receive higher payments for medical services. The Centers for Medicare & Medicaid Services on Thursday said it is seeking public comment and considering rules including prohibiting or limiting premium payments or cost-sharing for the individual marketplace plans, monetary penalties and limits on such payments.
It also sent a letter to dialysis centers that are part of Medicare informing them of these plans. "It is improper to influence people away from Medicare or Medicaid coverage for the purpose of financial gain," Shantanu Agrawal, CMS Deputy Administrator and Director of the Center for Program Integrity, said in a statement. Three of the largest U.S. health insurers have raised the issue of third-party payments in recent months, including UnitedHealth Group Inc, Anthem Inc and Aetna Inc.
TL;DR: publicly created monopoly behaves monopolistically
In response to customer ire over a list price of $608 for a two-pack of EpiPens, [generic drug manufacturer Mylen CEO Heather Bresch argued that the high price was necessary, saying that Mylan only nets $274 of that cost. Paul Ginsburg, director of the center for health policy at Brookings Institution, was skeptical of that characterization. "That seems very low for a brand name drug," Ginsburg said. In a graphic posted during Bresch's CBNC interview, the remainder of the cost — $334 per EpiPen two-pack or $1.3 billion in aggregate — was assigned to four parties: pharmaceutical benefits managers, insurers, wholesalers and retailers. But for name-brand drugs, "most of the dollar that the patient pays is going to the manufacturer," Ginsburg said. The EpiPen wasn't always such a flashpoint. In 2007, five years before she would become CEO and the year Mylan acquired the EpiPen, Bresch was earning around $2.5 million, and an EpiPen cost roughly $57 [...]
Also while on CNBC, Bresch laid the blame for the price escalation at the feet of the Affordable Care Act, calling the healthcare system broken and calling on lawmakers to fix it.
Generic drug companies once dealt almost exclusively in making cheap copies of pills and railed passionately against the anticompetitive tactics of brand-name competitors. Now, through a series of acquisitions and mergers, the handful of large generic companies that are left are increasingly investing in expensive brand-name drugs, and in doing so, are embracing many of the tactics they once scorned.
The CMS proposed rules Monday afternoon that would make several changes to the Affordable Care Act marketplaces and refine the law's risk adjustment, heeding calls from the health insurance industry.
The proposed rules (PDF), which normally are released in November, come after weeks of intense scrutiny and uncertainty about the viability of the new ACA insurance exchanges. Aetna, Humana and UnitedHealth Group, which have bigger footprints in the employer and Medicare Advantage markets, all have announced major retrenchments for the 2017 season, which begins Nov. 1.
One of the biggest changes involves the ACA's permanent risk-adjustment program. Lawmakers created risk adjustment to compensate plans for taking on sicker enrollees who have higher healthcare costs, thereby attempting to eliminate the incentive to cherry-pick healthier people.
So the only way to avoid the adverse selection problem is for the Administration to ask Congress to reintroduce a program they agreed to kill? Winning.
"Liberalism is arbitrarily selective in its choice of whose dignity to champion." Adrian Vermeule
At least eight pharmaceutical companies sell a decades-old drug that treats gallstones, but the competition has done little to keep its price down. Instead the price has skyrocketed. Two years ago, ursodiol’s wholesale price was as low as 45 cents a capsule. Then in May 2014, generic drug manufacturer Lannett Co. hiked its price to $5.10 per capsule, and one by one its competitors followed suit – with most charging nearly the same price. Experts say this is not how a competitive marketplace is supposed to work.
“When you have a generic drug with eight suppliers you would expect the prices to go down,” said Dana Goldman, director of USC’s Leonard D. Schaeffer Center for Health Policy & Economics. Unlike nearly every other developed nation, the U.S. allows drug manufacturers to set their own prices, a policy that has resulted in overall medicine costs being far higher than elsewhere. Increasingly, insurers are passing the cost along to patients through higher deductibles. Robert Frankil, the owner of Sellersville Pharmacy in Pennsylvania, said ursodiol is just one of dozens of generic drugs that he has found to spike in price in the last couple of years.
The correlation between the drug price increase and the expansion of the 340b program under the ACA is probably just coincidence. Regulators forcing businesses to give favored customers a discount isn't how the competitive marketplace is supposed to work either.
"Liberalism is arbitrarily selective in its choice of whose dignity to champion." Adrian Vermeule
As of July 1, the FDA had 4,036 generic drug applications awaiting approval, and the median time it takes for the FDA to approve a generic is now 47 months, according to the Generic Pharmaceutical Association, or GPhA. The FDA has approved more generics the past few years, but a flood of new applications has steadily added to the demand.
By comparison, the European Medicines Agency, Europe’s version of the FDA, has just 24 generics or biologically-based “biosimilars” awaiting approval. (The FDA’s count does not include biosimilars.) And the EMA along with the European Commission, which handles approval of marketing materials, are approving generics and brand name drugs in about a year on average, according to the EMA.
And it may have taken Congress and the media awhile to catch on, but consumers definitely knew. In fact, allergy sufferers were filing complaints with the FTC about Mylan’s price gouging as early as 2012. Gizmodo has obtained official consumer complaints about EpiPen pricing, all filed with the Federal Trade Commission (FTC), through a Freedom of Information Act request [...] The complaints start as a trickle in 2012, with some people noting that they’re suddenly forced to buy two EpiPens at a time when they only need one. The price, of course, became higher for two.
Dey Inc., Dey Pharma L.P. (formerly known as Dey, L.P.) and Dey L.P. Inc. have agreed to pay $280 million to settle False Claims Act allegations, the Department of Justice announced today. This settlement resolves claims by the United States that the defendants engaged in a scheme to report false and inflated prices for numerous pharmaceutical products, knowing that federal health care programs relied on those reported prices to set payment rates. The actual sales prices for the Dey products were far less than what Dey reported.
Consumers frequently contact the Bureau of Competition to alert us that the cost of a prescription drug suddenly spiked up, and ask if the FTC can take antitrust action to bring the price back down. The answer in a nutshell is that it depends on the reason for the price change. We’ve examined this issue a number of times and often found that price changes (up or down) are due to normal market forces and thus do not present an antitrust issue.
Sen. Joe Manchin strongly defended his daughter, Heather Bresch, over growing criticism that her company dramatically raised prices for its life-saving medicine in order to enrich her company -- and herself.
In an exclusive interview with CNN, the West Virginia Democrat broke his silence and sharply criticized lawmakers from both parties who have seized on the rising cost of EpiPen to bash his daughter's stewardship of her company, Mylan. He said lawmakers were trying to be "sensational" by seizing on Bresch's multi-million-dollar compensation.
And he slammed an article in USA Today for questioning whether his wife, Gayle, improperly used her position in an education group to boost the drug's prices, calling it a "cheap shot" and "tabloid" journalism. He praised Mylan as a West Virginia company that saved the country $180 billion. Bresch became a target of derision over the summer after a nearly 500% increase in the cost of the lifesaving allergy drug EpiPen, which is one of the company's signature products. The drug, which cost around $100 in 2009, shot up to as much as $600.
Lawmakers on Monday lashed out at the drug maker Mylan after a fresh disclosure that the company’s chief executive may have misrepresented the profits it earns on sales of EpiPens. According to a document filed with the US Securities and Exchange Commission and provided to Congress, the $50 profit per pen that Heather Bresch cited at last Wednesday’s House Committee on Oversight and Government Reform hearing included an estimated tax rate of 37.5 percent. Tax experts have said that Mylan is actually paying much less in taxes. Excluding taxes, EpiPen’s profits per two-pack are close to $170.
In February, the U.S. Court of Appeals for the District of Columbia Circuit said the time may be near when the federal courts will have to do something about the burgeoning Medicare appeals backlog, and it looks like that time is now. The HHS won’t get any more time to fix a backlog of 760,000 Medicare appeals before facing litigation filed by the American Hospital Association and others (Am. Hosp. Ass'n v. Burwell, 2016 BL 307248, D.D.C., No. 14-cv-851, 9/19/16) [...]
The court in particular singled out modifications to the Recovery Audit Contractor program (blamed by the AHA for the increase in Medicare appeals) as being insufficient to reduce the ALJ backlog despite the HHS's discretionary authority to make more sweeping changes to the program.
In December 2013, HHS imposed a two-year moratorium on assigning new appeals of claim denials. The department had a backlog of about 800,000 appeals in July 2014 when it gave its last official tally – and it’s likely to have grown since.
The court’s opinion observed that the department “has the capacity to process only about 72,000 appeals per year, a far cry from the almost 400,000 appeals it received in fiscal year 2013, or from the more than 800,000 appeals that composed its backlog in July 2014. These figures suggest that at current rates, some already filed claims could take a decade or more to resolve.” That administrative logjam delays billions of dollars in Medicare reimbursements to hospitals, the AHA noted. The AHA and several hospitals sued HHS in May 2014 over the backlog at the administrative law judge (ALJ) level, the third levels of appeals. An ALJ has 90 days to decide an appeal.
BlueCross BlueShield of Tennessee sent shock waves Monday across Tennessee with the company's decision to exit the Obamacare exchange in Nashville, Memphis and Knoxville, a move that highlights persistent volatility in the young health insurance marketplace. Three years into the Affordable Care Act exchange, the state’s largest insurer is grappling with hefty losses and ongoing uncertainty on the marketplace. BCBST is open to coming fully back into the market once uncertainties about policies and the membership wane.
The insurer made "an extremely difficult but necessary decision" to leave the state's three largest markets as it tries to manage its number of members to hit a break-even point after three years of losses, said Roy Vaughn, chief communications officer of BCBST. The insurer is projecting losses approaching $500 million by the end of 2016. BCBST is not alone, as many insurers have been saddled with uncertainty and significant losses in the federally run marketplace. The Chattanooga-based insurer, which was the only insurer that originally planned to sell statewide, expects to shed nearly 130,000 people from its rolls under the change and keep about 80,000 primarily in rural areas.
In 2015, BCBST had 58% exchange market share, and the CHA co-op had 38%. CHA went under. In 2016, BCBST had 69% of the exchange market share, United Health had 16%, and Humana and Cigna had the rest. United Health exited earlier this year. How willing (and able) Humana and Cigna are to absorb 130k potential customers remains to be seen. State regulators approved a 62% rate increase for BCBST's exchange plans.
"Liberalism is arbitrarily selective in its choice of whose dignity to champion." Adrian Vermeule
The Obama administration is seeking to toss out a pair of high-profile healthcare lawsuits in which insurers claim they are owed millions of dollars under the Affordable Care Act. The two insurers, Moda Healthcare and BlueCross BlueShield of North Carolina, have sued the federal government over a combined $338 million in ObamaCare payments they argue are overdue.
The Justice Department filed motions to dismiss both lawsuits on Friday, arguing that the federal government isn’t responsible for those payments at all. That argument — which goes further than the department’s move to dismiss a similar case in June — could have a major ripple effect throughout the marketplace. Tim Jost, a health policy professor and long-time observer of the Affordable Care Act, said the federal government is now digging in on the merits of the cases for the first time. "It seems to me that HHS is clearly changing its position in these cases," Jost said Monday. "The motions filed in both of these cases is a full-throated repudiation of any obligation [of the payments." [...]
Moda argues it is owed $191 million from 2014 and BlueCross BlueShield says it is owed $147 million. The Obama administration has not yet released payment data from the 2015 year, though it plans to do so in December 2016, according to the filing. In their new documents, Justice officials argued that the Department of Health and Human Services (HHS) does not owe that money to insurance companies, in part because Congress has “directly spoken” about its intent to limit the use of federal dollars into the program. “Under Moda’s interpretation, HHS would be the uncapped insurer of the insurance industry itself,” the Justice Department wrote. “Congress did not intend that result.”
From February 2016 (FWIW Moda's a mid sized regional insurer, not a co-op):
State regulators have agreed to lift their restrictions on Moda Health Plan selling and renewing policies while the troubled health insurer and its parent company sell assets and take other steps to shore up its depleted capital reserves.
The Oregon Department of Consumer and Business Services said it reached an agreement under which the insurer and its parent company, Moda Inc., would inject $170 million in new capital into the insurance company. The plan is for Moda and its parent company to sell a portion of their accounts receivable from the federal government to a third party, for its parent company to sell other, unspecified assets, and to borrow more money by issuing "surplus notes."
By comparison, the travails of John, who manages a small retail business, is far more emblematic of the myriad ways that ObamaCare has wrought havoc on the lower-middle-class, working Americans that the law was ostensibly meant to help. John changed jobs in 2014, and his new employer–a small business–didn’t offer coverage at work. In 2015 he qualified for a tax credit to purchase coverage on his state’s exchange for himself, his wife and his college-aged daughter. With the tax credit, his monthly health premiums were under $300. When his daughter graduated college and got a job in late August, things quickly changed.
With his daughter’s income, their combined household would now earn too much to qualify for the subsidies that they were receiving. So his daughter bought her own coverage in 2016. John, a 53-year-old non-smoker, sought insurance for just himself and his 50-year-old wife. But with their daughter now getting her own coverage, the ObamaCare math changed sharply as their household fell from three to two people.
Their insurance premiums rose from under $300 a month for their three-person household that included their daughter in 2015, to more than $600 a month for a plan covering just the two of them in 2016. This was for a purportedly low-cost “silver” insurance plan that carried a deductible of close to $12,000 a year. Things got worse. His daughter’s new income, which started in August, combined with some bonuses John had received at work, pushed him outside the ObamaCare bracket that had qualified him for his 2015 subsidies. The Internal Revenue Service told him he would owe most of the subsidies back. The bill came to $6,900.
http://www.forbes.com/sites/scottgottli ... 0d328b2d08
This situation is hopefully rare, but those potentially in similar situations (job changes, bonuses at work, college age kids) might want to have extra conversations with their accountants sooner rather than later.
"Liberalism is arbitrarily selective in its choice of whose dignity to champion." Adrian Vermeule
East is East and West is West and never the twain shall meet...
[youtube]http://www.youtube.com/watch?v=PgRVQIBou8Q[/youtube]
He makes some good points but it's like watching the Scott Hall 30for30.
"Liberalism is arbitrarily selective in its choice of whose dignity to champion." Adrian Vermeule
In an unprecedented study of 2.2 million emergency room visits across the United States, Yale researchers found that 22% of patients who went to emergency departments within their health-insurance networks were treated by an out-of-network doctor and potentially incurred major, unexpected expenses. The study, based on data from a large commercial insurer that included tens of millions of covered individuals, provides the first national estimate of the frequency of “surprise” out-of-network medical billing. The researchers describe their findings in an article published in the Nov. 16 edition of the New England Journal of Medicine [...]
[The researchers] focused the study on emergency room visits for people under 65 years of age that occurred nationwide between January 2014 and September 2015, which amounted to 2.2 million visits covering all 50 states and more than $7 billion in spending. They discovered that patients were charged for out-of-network care on 22% of the visits.
Out-of-network emergency physicians charged 798% of Medicare rates, while in-network emergency physicians generally were paid at 297% of Medicare rates, according to the findings. The researchers calculated that patients were exposed to an average bill of $622.55 (and potentially much more) if their insurer only covered in-network rates. According to the Federal Reserve, 47% of Americans could not cover an unexpected $400 expense without incurring credit card debt or selling assets.
My mom got nailed by it. Went to an ER in her system here (while visiting)...paid her copay, then got hit with $600 in bills from the physician group. After some back and forth between her, the insurance company, and Memorial Hermann she was able to get the fees dropped.
An odd thing around here, there are literally 5 independent ERs within a 3 mile radius of my house and about 4 Urgent Cares.
](http://www.irongarmx.net/phpBB2/images/smilies/eusa_wall.gif "Brick wall"){kind=small}