Daily Insurance Report - October 17, 2023
Surprise billing arbitration is still a mess
By Maya Goldman - Nearly two years after a surprise medical bill ban took effect, the process for settling billing disputes between insurers and providers is still mired in litigation and many cases remain unresolved. Read Full Article…
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Arbitration Rules Controversy: The Biden administration faces legal challenges to its arbitration rules pertaining to how providers are compensated for disputed out-of-network services. The Centers for Medicare and Medicaid Services recently reopened its portal for new claims submissions after a pause since August, but the administration has no immediate plans to release new guidance on a pivotal payment benchmark for disputed bills.
Disputes Over "No Surprises Act": Introduced in 2022, the No Surprises Act aims to shield consumers from unexpected medical expenses. However, discerning the right method for insurers to address out-of-network bills has been problematic. The Texas Medical Association has lodged multiple lawsuits regarding the law's components and associated regulations. Although the federal arbitration system ruled in favor of providers in about 71% of resolved disputed claims, claims submitted for arbitration exceeded official projections significantly in the Act's first year.
Stakeholders' Concerns and Future Implications: Medical specialties most engaged in these disputes express apprehensions regarding the delay in full arbitration rule enforcement. Meanwhile, insurance companies are expressing frustrations, emphasizing the cost and complexity of the arbitration system. As legal battles continue, it's likely some litigation pertaining to the No Surprises Act may reach the Supreme Court. While the ongoing disputes and evolving rules could potentially increase insurance premiums, they might also result in erroneous cost-sharing for patients.
Hospital spending is projected to increase by 9.3% this year
By Susan Morse - Healthcare spending projections for 2030 are now 21% below what the Centers for Medicare and Medicaid Services expected a decade ago, according to a study by Peterson Center on Healthcare and KFF. Read Full Article…
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Revisions in Health Spending Projections: In 2010, health spending was projected to reach $4.64 trillion by 2020, but by 2015, this estimate was revised to $4.20 trillion. By 2020, actual spending stood at $4.12 trillion. While 2015 projections estimated 2025 health spending at $5.63 trillion, the latest estimates put it at $5.19 trillion. The inconsistencies are attributed to slowed health expenditure growth in the late 2010s and provisions in the IRA, allowing Medicare to negotiate prices for high-cost drugs.
Hospital and Enrollee Spending Trends: In 2023, hospital spending is projected to rise by 9.3%, with an average annual growth rate of 6% beginning 2025. Per-enrollee spending across all payers is predicted to rise in 2023 and 2024. For private insurance enrollees, spending growth slowed to 1.5% in 2022 but is expected to accelerate to 6.8% annually in 2023 and 2024. Medicaid per-enrollee spending is set to grow by 7.4% in 2024, but overall Medicaid spending will decrease by 2.1% from 2023 to 2024 due to an 8.9% drop in enrollment.
Outlook on Prescription Drug Spending: Despite a 7.7% per capita growth in prescription drug spending in 2021, growth is projected to slow to 2.8% per capita in 2023. The slowing trend is influenced by generic drugs entering the market and the Inflation Reduction Act's reforms on Medicare drug prices. The federal government's funding during the public health emergency to maintain Medicaid beneficiary coverage has been decreasing, affecting the Medicaid prescription drug spend.
Bonus Point - Health Spending's GDP Impact: Health spending is forecasted to represent almost 20% of the U.S. economy by 2031. After reaching 19.7% of GDP in 2020, it decreased to 18.3% in 2021 and is estimated to have returned to pre-pandemic levels in 2022 (17.4% of GDP). Starting in 2023, health spending is expected to surpass overall economic growth, aiming for 19.6% of GDP by 2031.
6 ways Josh Bersin thinks AI can ‘superpower’ HR in 2024
By Jen Colletta - Artificial intelligence technology has been in the making for decades, and, last year, with the dawn of generative AI, it finally took off at scale. Now, AI is about to “revolutionize” HR in the coming year, predicted industry analyst Josh Bersin this week. Read Full Article…
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Factors Leading to AI in HR: A combination of ongoing low unemployment, economic challenges, increasing labor activity, and growing employee stress has led CEOs to prioritize employee well-being over customer and stakeholder interests. With declining fertility rates, there is a pressure on leadership to optimize productivity with fewer employees. As a result, the focus is on equipping every employee, including those in HR, with advanced tools such as AI to enhance their capabilities.
AI's Disruptive Role in HR: AI is set to play a dominant role in HR technology, profoundly influencing various HR aspects:
Skills Identification - With employees frequently switching roles, there's a need for faster skills identification, making it a prime area for AI intervention.
Employee Experience - As tech becomes integral to daily work, AI can simplify the experience, with success depending on ease of use and its integration into work flows.
Recruiting - AI offers multiple opportunities in the recruiting sector, from candidate evaluation to fitting roles, streamlining the process while upskilling the role of recruiters.
Talent Marketplaces - AI facilitates dynamic talent marketplaces, encouraging an employee-driven approach to role mobility, which can be more beneficial than a top-down approach.
Learning - AI promises to revolutionize the learning and development sector, making it faster, more personalized, and integrated into daily workflows.
Employee Listening - AI will play a pivotal role in gathering and analyzing employee feedback, enabling HR to make informed decisions based on employee insights.
Future of AI in HR: While the potential of AI in HR is still unfolding, its current pace of disruption is significant. AI stands as the key to driving solutions that will drastically improve productivity in the evolving economy, catering to the needs of employees, managers, leaders, and HR professionals.
Employer plans are unsuitable for many Americans, survey finds
By Noah Tong - Four in 10 people insured by employer-provided health plans find their out-of-pocket costs are so expensive they need to dip into savings and take on debt, according to a nationwide survey of 2,500 Americans enrolled in employer-sponsored coverage. Read Full Article…
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Health Plan Ineffectiveness: A recent survey by Curative Insurance Company and The Health Analytics and Insights Group revealed that traditional employer-provided health plans are falling short for many Americans. Nearly 50% of those surveyed indicated they would be challenged to meet healthcare expenses in the event of a medical emergency or chronic illness diagnosis. This is accentuated by the fact that out-of-pocket medical expenses surpass the monthly budgets of approximately two-thirds of insured individuals.
Consequences of High Costs: The financial strain of healthcare is manifesting in various ways. Many insured Americans are avoiding necessary care due to cost concerns. Specific statistics include:
- 65% of those in high-deductible plans reported their health negatively affected their job performance.
- 35% of individuals deferred medical care in the past year over cost worries, and 46% believe they will face challenges affording care in the future.
- To manage healthcare expenses, 17% reduced spending on basic necessities like food and clothing, 16% increased credit card debt, and 8% sought additional employment or increased their working hours.
Impact on Specific Demographics: The challenges associated with healthcare expenses are even more pronounced among certain groups and underrepresented populations:
- Autoimmune disorder patients (65%) and LGBTQ+ respondents (69%) reported postponing care in the previous year.
- Mothers are three times more adversely affected by out-of-pocket costs than fathers.
- Around 80% of individuals from Hispanic or LGBTQ communities are more likely to incur expenses for services not covered by their insurance.
- Navigating insurance is particularly cumbersome for Hispanic communities, with over half stating they spent two or more hours liaising with their insurance providers to obtain necessary medications in the past three months.
FTC is full steam ahead on sweeping noncompete ban, reinforcing antitrust, agency head tells docs
By Dave Muoio - Healthcare lobbying organizations’ efforts to carve out industry-specific exemptions in recently proposed Federal Trade Commission (FTC) policies are unlikely to see their requests reflected in the regulator’s final rulemaking, Commissioner Lina Khan suggested this week. Read Full Article…
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FTC's Noncompete Ban Proposals: At the ACEP’s annual meeting, Khan highlighted efforts to update competition policy, with a significant focus on January’s proposed ban on noncompete agreements. While many from the healthcare sector provided feedback, a significant portion supported the FTC's proposal to ban noncompetes altogether. However, healthcare employer groups expressed concerns about retention difficulties, especially for the for-profit part of the hospital sector. The American Medical Association also recently opposed noncompete clauses for employed physicians.
Increased Scrutiny on Mergers: Khan emphasized the FTC's enhanced scrutiny on mergers, especially considering labor impacts during their assessments. She mentioned the agency's goal to deter illegal deals by making Wall Street think of antitrust risks at the beginning of transactions. She further highlighted the regulator's focus on horizontal consolidations, such as hospitals acquiring other hospitals, and acknowledged the rise of vertical integration deals and their potential conflicts of interest.
Concerns Over Private Equity in Healthcare: Khan pointed out the potential detrimental effects of private equity within the healthcare sector. Beyond challenging a specific roll-up scheme in Texas, the FTC is also updating the Hart-Scott-Rodino Form to monitor anticompetitive consolidation better. Khan encouraged healthcare providers to share their experiences, emphasizing the bipartisan concern over the role of private equity in healthcare. She stressed the importance of continuous engagement with lawmakers at both federal and state levels to address these issues.
Mercer Exec: Employers Are Extremely Concerned About Cost
By Marissa Plescia - Cancer and pharmacy services are driving up costs for employers. One Mercer exec recently laid out several recommendations for employers to manage these costs. Employers have a long list of concerns when it comes to healthcare, and at the top of that list is cost, one expert said. Read Full Article…
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Rising Healthcare Costs Concern Employers: Agnes Quiggle from Mercer highlights that employers are deeply concerned about rising healthcare costs. The top driver for these costs is cancer, which has recently surpassed musculoskeletal conditions. Quiggle points out that with cancer diagnoses increasing at a rapid rate and people living longer with the disease, the financial burden on employers has grown significantly. In addition, pharmacy spending, particularly on drugs like GLP-1s for type 2 diabetes and obesity, also plays a major role in escalating costs.
Strategies to Balance Quality and Cost: To address the issue of exorbitant healthcare costs, Mercer is advocating for a closer evaluation of medical providers based on their quality scores. Quiggle suggests eliminating providers with poor quality scores that charge above the standard rate, emphasizing that employers should aim for at least average or better quality. When it comes to managing cancer costs, the idea is to collaborate with cancer support vendors, like Thyme Care, which offer services ranging from cancer screenings to 24/7 chat support with coaches.
Managing Prescription Drug Costs and Embracing Virtual Care: Quiggle emphasizes that a critical step in controlling prescription drug expenses is to determine the right partnership, whether it's with a collective, one of the big three PBMs, or a transparent PBM that clearly outlines drug costs and margins. Furthermore, she advises employers to examine the virtual care options in their health plans to ensure there's no redundancy in costs — a situation where an employee might end up being charged for both a virtual and an in-person visit for the same issue.
Medicare Part B premiums to rise by 6 percent in 2024
By Joseph Choi - The Centers for Medicare and Medicaid Services (CMS) announced the monthly Medicare Part A and B premiums for 2024 on Thursday, with the costs set to go up by 6 percent next year. The premiums would increase by $9.80 from $164.90 to $174.70 in 2024 and the annual deductible for Medicare Part B beneficiaries will go up from $226 to $240 as well. This price increase comes after Medicare Part B premiums went down for the first time in more than 10 years in 2023. Read Full Article…
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Medicare Part B Services and Premiums: Medicare Part B provides coverage for medically essential and preventive services such as mental health, certain outpatient drugs, ambulance services, and durable medical equipment. Recently, the announced premium for 2024 aligns with the earlier estimates provided by the Medicare Board of Trustees.
340B Drug Pricing Program & CMS Rate Changes: The 340B Drug Pricing Program, initiated in 1992, mandates drug discounts for eligible healthcare organizations. Before 2018, the reimbursement rate for Part B-covered outpatient drugs was based on the product's average sales price plus 6%. This rate changed in 2017 when the CMS updated it to the average sales price minus 22.5% to more accurately depict the costs 340B-eligible hospitals face. However, this change lasted from 2018 to 2022, after which the Supreme Court deemed it illegal due to the lack of a prior survey on hospital acquisition costs.
Remedy for Affected Hospitals: Due to the rate change, hospitals were affected financially from 2018 to 2022. As a solution, the CMS suggested a one-time payment to the affected institutions. It is estimated that these healthcare entities earned approximately $10.5 billion less than they should have under the original policy. Out of this amount, $1.5 billion was already dispensed by the time the solution was introduced, leaving a proposed disbursement of the remaining $9 billion to the impacted 340B-eligible entities.
The impact of work on well-being: 6 factors that will affect the future of work and health inequalities
By Peter Smith - Work has long been considered a social determinant of health. Like housing, education, income security and other matters of economic and social policy, work can be a key factor in creating, maintaining or exacerbating unequal health outcomes across different societal groups. Read Full Article…
VBA Article Summary
Work as a Social Determinant of Health: Despite recognizing work as a social determinant of health, it's been underutilized to tackle health inequities. The researchers advocate for a stronger focus on improving work environments to boost overall population health and diminish health disparities. Historical examples, such as the 1919 Hours of Work Convention, have shown the potential of such efforts. However, occupational health often remains isolated from wider population health concerns, concentrating mostly on evident work hazards.
Deep Dive into Work and Health Relationship: Diseases' unequal distribution across occupations has been known since the 1700s. The Whitehall studies from the 1980s emphasized that aspects like minimal control over one's job can contribute to major diseases. Current research methodologies and vast datasets allow for more detailed examinations of the broader health implications of changes in the work environment.
Emerging Factors and Recommendations: Several factors will shape future work and health disparities: telework, international migrant workers, intersections of multiple social stratifiers, precarious employment, long and irregular work hours, and climate change. Addressing these demands innovative strategies, ranging from considering the unique health inequities experienced by various worker groups to developing novel solutions for gig workers. Interventions to mitigate work-related health inequalities should extend beyond individual workers. Emphasis should be on systemic changes at organizational, sectoral, and societal levels. Greater collaboration across multiple fields, including economics, law, and social sciences, is essential to develop and implement these holistic solutions.