Health Plans

Insurers Are Required to Cover Only ‘Medically Necessary’ COVID-19 Tests

July 2, 2020

As more employers turn to COVID-19 testing to see if employees are safe to return to the workplace, the Trump administration has clarified that insurers must cover only physician-ordered “medically necessary” diagnostic and antibody tests.

The guidance, released jointly on June 23 by HHS, the Dept. of Labor and the Dept. of the Treasury, also says self-funded employer plans must pay for COVID-19 testing that’s medically appropriate.

By Jane Anderson

As more employers turn to COVID-19 testing to see if employees are safe to return to the workplace, the Trump administration has clarified that insurers must cover only physician-ordered “medically necessary” diagnostic and antibody tests.

The guidance, released jointly on June 23 by HHS, the Dept. of Labor and the Dept. of the Treasury, also says self-funded employer plans must pay for COVID-19 testing that’s medically appropriate.

“Testing conducted to screen for general workplace health and safety (such as employee ‘return to work’ programs), for public health surveillance for SARS-CoV-2, or for any other purpose not primarily intended for individualized diagnosis or treatment of COVID-19 or another health condition is beyond the scope” of the requirements embedded in the legislation approved by Congress earlier this year that requires insurers to pay for COVID-19 testing, the FAQ document said.

“I think now that [the insurers] have had this clarification, they’re going to use that as part of their determination of coverage,” Ashraf Shehata, KPMG national sector leader for health care and life sciences, tells AIS Health.

Richard Hughes IV, managing director at Avalere Health, says that it’s possible to argue that Congress intended insurers to cover all tests for their members, regardless of whether a physician ordered them, whether the person was symptomatic, or whether the test was needed to return to work.

However, Hughes says it’s also possible to argue that Congress gave CMS the authority to implement these testing requirements with some restrictions. “There could be tremendous variability across payers’ approaches to coverage policy and how they process claims,” he says.

In fact, many insurers already have moved to limit testing coverage in some ways, although their policies are fluid and have been updated frequently, says Danielle Showalter, principal at Avalere.

Individuals whose plans will not cover a test can turn to what Shehata calls the “retail model,” which is direct-to-consumer COVID-19 testing sites that don’t require a health care provider’s permission. Costs vary for this type of testing, which generally wouldn’t be covered by insurance unless the person is symptomatic.

Datapoint: Blue Cross NC Will Pay Docs to Switch to Value-Based Care

July 1, 2020

Blue Cross and Blue Shield of North Carolina last week launched its Accelerate to Value program, an initiative that will incentivize independent primary care groups in North Carolina to transition to value-based care. Beginning in September, participating practices will receive direct payments from the insurer based on 2019 revenue, which will continue into 2021. By the end of 2020, the providers must join one of Blue Cross NC’s existing accountable care organizations or work with Aledade to transition independently. Blue Cross NC is currently the largest insurer in North Carolina, serving 2,593,316 members.

Blue Cross and Blue Shield of North Carolina last week launched its Accelerate to Value program, an initiative that will incentivize independent primary care groups in North Carolina to transition to value-based care. Beginning in September, participating practices will receive direct payments from the insurer based on 2019 revenue, which will continue into 2021. By the end of 2020, the providers must join one of Blue Cross NC’s existing accountable care organizations or work with Aledade to transition independently. Blue Cross NC is currently the largest insurer in North Carolina, serving 2,593,316 members.

Source: AIS’s Directory of Health Plans

Datapoint: Cigna and Oscar Reveal First Cobranded Small Group Markets

June 30, 2020

Cigna Corp. and Oscar Health last week revealed the first markets for their new cobranded fully insured commercial products for the small group market. The new plans, set to launch in the fourth quarter of 2020, will be available in the San Francisco Bay Area, Atlanta and four cities in Tennessee; Chattanooga, Knoxville, Memphis and Nashville. The products will integrate primary medical, behavioral health and pharmacy benefits, as well as a 24/7 telemedicine service, according to both companies. About 12 million people are currently enrolled in small group plans, with Cigna and Oscar both holding relatively small shares of the market, at 43,795 and 18,818 lives, respectively.

Cigna Corp. and Oscar Health last week revealed the first markets for their new cobranded fully insured commercial products for the small group market. The new plans, set to launch in the fourth quarter of 2020, will be available in the San Francisco Bay Area, Atlanta and four cities in Tennessee; Chattanooga, Knoxville, Memphis and Nashville. The products will integrate primary medical, behavioral health and pharmacy benefits, as well as a 24/7 telemedicine service, according to both companies. About 12 million people are currently enrolled in small group plans, with Cigna and Oscar both holding relatively small shares of the market, at 43,795 and 18,818 lives, respectively.

Source: AIS’s Directory of Health Plans

Payers Grapple With How to Address Inequality in Health Care

June 30, 2020

COVID-19 has disproportionately infected and killed people of color, causing many health care leaders to renew their focus on racism’s role in social determinants of health (SDOH). Since George Floyd was killed by Minneapolis police and Black Lives Matter protests took over America’s streets, the conversation about racism in health care has become even more urgent.

A June 16 Brookings Institution analysis of data through June 6 from the Centers for Disease Control and Prevention (CDC) found that “the age-adjusted COVID-19 death rate for Black people is 3.6 times that for whites, and the age-adjusted death rate for Hispanic/Latino people is 2.5 times that for whites.”

By Peter Johnson

COVID-19 has disproportionately infected and killed people of color, causing many health care leaders to renew their focus on racism’s role in social determinants of health (SDOH). Since George Floyd was killed by Minneapolis police and Black Lives Matter protests took over America’s streets, the conversation about racism in health care has become even more urgent.

A June 16 Brookings Institution analysis of data through June 6 from the Centers for Disease Control and Prevention (CDC) found that “the age-adjusted COVID-19 death rate for Black people is 3.6 times that for whites, and the age-adjusted death rate for Hispanic/Latino people is 2.5 times that for whites.”

According to Rep. Lauren Underwood (D-Ill.), spotty health insurance coverage is partly to blame for bad COVID-19 outcomes for people of color. “These racial gaps…reflect a deeply entrenched racial inequity throughout our health care system, and one of the key drivers of these disparities is unequal access to care. The uninsured rate for African Americans is more than 1.6 times higher than the uninsured rate for white Americans,” she said during a June 22 meeting of the House Committee on Education and Labor about the pandemic’s impact on education, health care and the workforce.

In a webinar organized by the Alliance for Health Policy, Adaeze Enekwechi, president of health care consultancy IMPAQ International, said expanding coverage is a critical part of improving health outcomes in communities of color going forward. “Whether it’s through Medicaid or some of the other policy discussion points around Medicare, but I think we need to think long and hard about that,” she said.

Wizdom Powell, director of the Health Disparities Institute at the University of Connecticut, argued that recent mass layoffs and furloughs showed the need to improve coverage continuity and portability in general. She observed people of color are more likely than the population at large to be unemployed or work in industries that do not typically offer health care coverage.

During a panel at the recent AHIP Institute & Expo, Kaiser Permanente Executive Director for Strategic Customer Engagement, Product Innovation and Evaluation Jennifer Christian-Herman observed that an intentional focus on SDOH by employers and contracting plans can drive business value.

CVS Health Corp. executive Garth Graham, M.D., agreed and said that many forward-thinking plans are already working on improving housing, nutrition and transportation for low-income members.

Highmark to Affiliate With Largest Insurer in Western New York

June 26, 2020

Highmark Inc. on June 16 said it plans to affiliate with HealthNow New York Inc. Combined, the two health insurers would cover more than 4.4 million enrollees, according to AIS’s Directory of Health Plans. Highmark has a strong presence in Pennsylvania, Delaware and West Virginia, and if approved, this deal will expand its footprint in New York. HealthNow New York’s plans comprise 6.97% of the state’s commercial risk market, with over 0.31 million enrollees.

by Jinghong Chen

Highmark Inc. on June 16 said it plans to affiliate with HealthNow New York Inc. Combined, the two health insurers would cover more than 4.4 million enrollees, according to AIS’s Directory of Health Plans. Highmark has a strong presence in Pennsylvania, Delaware and West Virginia, and if approved, this deal will expand its footprint in New York. HealthNow New York’s plans comprise 6.97% of the state’s commercial risk market, with over 0.31 million enrollees.

Telehealth Regulation and Reimbursement Issue Sparks Debates

June 25, 2020

Telehealth use has surged during the COVID-19 pandemic, and is likely to remain higher than it was before the crisis on a permanent basis. However, the difficult work of regulating and establishing rate structure for telehealth beyond the COVID-19 pandemic has only just started.

On June 17, the Senate Health, Education, Labor and Pensions Committee held a hearing about how to consolidate the gains in telehealth made necessary by the pandemic.

By Peter Johnson

Telehealth use has surged during the COVID-19 pandemic, and is likely to remain higher than it was before the crisis on a permanent basis. However, the difficult work of regulating and establishing rate structure for telehealth beyond the COVID-19 pandemic has only just started.

On June 17, the Senate Health, Education, Labor and Pensions Committee held a hearing about how to consolidate the gains in telehealth made necessary by the pandemic.

The most important policy decision that Congress must make is on reimbursement. CMS has elected to compensate telehealth visits at the same rate as in-person visits for the duration of the pandemic, but whether that will continue is likely to be decided in the coming weeks. At present, commercial plans have a wide variation in telehealth reimbursement amounts.

Providers will likely oppose setting telehealth reimbursement at rates lower than in-person visits, and experts predict the balance of visits will shift more heavily toward remote consultations going forward.

Yet part of the allure of telehealth for payers and patients is that a remote visit generally costs less than an in-person consultation. The stakes are high for the payer industry: Provider services seem to be the main driver behind higher overall health care spending in the last decade. If telehealth visits account for a meaningful share of overall visits across the industry, a lower rate of reimbursement will make a big difference in lowering costs.

The other major regulatory challenge for telehealth is provider licensing. State medical boards exercise control over whether a clinician can practice in their state, and it is typically illegal for a practitioner licensed in one state to care for patients in another.

“We think the best way to handle [state licensure] is through a compact,” said Krista Drobac, the executive director of the Alliance for Connected Care, during a session at America’s Health Insurance Plans’ Institute & Expo. “We would like to see licensure reciprocity or mutual recognition, what we refer to as licensure portability.…Congress can’t step in and take over licensing — that’s just not a federal responsibility.”

Yet Avalere Health founder Dan Mendelson takes a different view. “The licensure issues are problematic. The Congress needs to act more aggressively to make it easier to deliver telemedicine in the United States,” he says.