Health Plans

Health Insurers Rethink Workplaces in Post-COVID Future

April 6, 2021

With COVID-19 vaccination becoming increasingly widespread, businesses of all types are starting to plan for what their workplaces — both remote and office-based — will look like in the “new normal” created in the pandemic’s aftermath. Health insurers are no exception.

CareFirst BlueCross BlueShield, for example, recently unveiled “the next phase of a reimagined employee and workplace experience strategy.” The nonprofit insurer explained in a March 24 news release that it is “working collaboratively with technology partners to design a new multi-faceted platform for employees that will be interactive and help foster a fully integrated work experience” wherever workers are located.

NOTE: The abstract below is a shortened version of the Health Plan Weekly article “With Pandemic’s End in View, Insurers Rethink Workplaces.”

By Leslie Small

With COVID-19 vaccination becoming increasingly widespread, businesses of all types are starting to plan for what their workplaces — both remote and office-based — will look like in the “new normal” created in the pandemic’s aftermath. Health insurers are no exception.

CareFirst BlueCross BlueShield, for example, recently unveiled “the next phase of a reimagined employee and workplace experience strategy.” The nonprofit insurer explained in a March 24 news release that it is “working collaboratively with technology partners to design a new multi-faceted platform for employees that will be interactive and help foster a fully integrated work experience” wherever workers are located.

CareFirst just passed the one-year anniversary of having 95% of its associates working fully remote, the insurer noted, but it doesn’t plan to have that be the case forever. “In the future we plan to implement a hybrid strategy,” the insurer tells AIS Health. “Approximately 55% [of workers] will be enabled to work in a full-time remote capacity spending one day or less a week in an office setting; 30% will divide their time in an office 2-3 days a week and [be] remote the remainder of the time; and close to 15% will be full-time in a CareFirst office location 4-5 days a week.”

Similar to CareFirst, Highmark Inc. has kept most of its associates out of the office since the start of the pandemic. “And we have told employees it is unlikely that any employees will return to an office environment before July of this year,” the company said.

Those two insurers’ strategies are not out of step with what Willis Towers Watson has been observing through its polling and conversations with employers, says Rachael McCann, senior director of health and benefits at the benefits consulting firm.

“For the most part…we are seeing more companies across all industries, [in] the U.S. and global in nature, pushing pause because they’re looking at their real estate,” she says.

In Willis Towers Watson’s “2021 Emerging From the Pandemic Survey,” released in February, companies in the health care industry reported that an average of 44% of their employees worked remotely as of the first quarter of 2021, and they expect the share to be 30% by the end of the year.

Datapoint: Blues Plans Enroll Half of Group Risk Market

April 1, 2021

Nearly half (47.3%) of the national group commercial risk insurance market is enrolled in a Blue Cross and Blue Shield affiliate plan. Of the 26.2 million group risk lives enrolled in a Blues plan, 20.5% are Anthem, Inc. members.

Nearly half (47.3%) of the national group commercial risk insurance market is enrolled in a Blue Cross and Blue Shield affiliate plan. Of the 26.2 million group risk lives enrolled in a Blues plan, 20.5% are Anthem, Inc. members.

Source: AIS’s Directory of Health Plans

Study Highlights Promise of Bundled Payments in Employer Plans

April 1, 2021

A bundled payment program run by San Francisco-based digital health company Carrum Health resulted in an average per-episode savings of more than $16,000 per orthopedic or surgical procedure, a recent RAND Corp. analysis found.

Counting both procedures reimbursed under the bundled payment program and procedures reimbursed outside the program, per-episode costs for the three procedures studied — spinal fusion, major joint replacement and bariatric surgery — were 10.7% lower overall, on average, than costs for comparable procedures prior to implementation of the program. That added up to a total savings of $4,229 per episode, the study found.

NOTE: The abstract below is a shortened version of the Health Plan Weekly article “Bundled Payment Program for Employer Plans Reduces Costs.”

By Jane Anderson

A bundled payment program run by San Francisco-based digital health company Carrum Health resulted in an average per-episode savings of more than $16,000 per orthopedic or surgical procedure, a recent RAND Corp. analysis found.

Counting both procedures reimbursed under the bundled payment program and procedures reimbursed outside the program, per-episode costs for the three procedures studied — spinal fusion, major joint replacement and bariatric surgery — were 10.7% lower overall, on average, than costs for comparable procedures prior to implementation of the program. That added up to a total savings of $4,229 per episode, the study found.

The analysis, published in the March issue of Health Affairs, determined that employer-sponsored health plans captured approximately 85% of the total savings, or $3,582 per episode. Patient cost-sharing payments decreased by $498 per episode, a 27.7% relative decrease.

“What we studied is a program that uses provider-focused financial incentives to give providers plans to operate more efficiently, and then also pairs it with incentives to patients to use high-value providers,” says study author Christopher Whaley, a policy researcher in health care at the RAND Corp. in Santa Monica, Calif. “What we found is that, following the introduction of this program, overall episode costs fell by quite a bit, and patient cost-sharing actually went to zero for patients who went through the program.”

“[The] bundled prices tend to be quite a bit lower than if we just go through the normal insurance system,” Whaley says, noting that the providers give up higher prices for a guaranteed payment with no insurance road blocks or red tape. Implementation of the direct payments program also was associated with reductions in price variation, the study found.

Although researchers didn’t look at outcomes as thoroughly as they did costs, they did find that some outcomes appeared to be better in patients participating in the bundled payment program, Whaley says: “For example, for bariatric surgery, the national commercial patient readmission rate is, I think, around 4%, and for the patients who went through the program, it was 0.5%. So it looks like readmissions are about 75% lower, which is a huge quality difference.”

Datapoint: Anthem to Acquire Senior Home Management Company

March 30, 2021

Anthem, Inc. last week unveiled plans to acquire myNEXUS, Inc., “a comprehensive home-based nursing management company for payors,” the insurer said in a press release. The myNEXUS platform is a provider-facing service, and allows for streamlined authorization of in-home nursing care. Anthem said myNEXUS currently serves 1.7 million Medicare Advantage (MA) members across 20 states. Anthem is currently the fifth-largest MA payer in the U.S., with 1,493,268 enrollees, a 16% increase from last year.

Anthem, Inc. last week unveiled plans to acquire myNEXUS, Inc., “a comprehensive home-based nursing management company for payors,” the insurer said in a press release. The myNEXUS platform is a provider-facing service, and allows for streamlined authorization of in-home nursing care. Anthem said myNEXUS currently serves 1.7 million Medicare Advantage (MA) members across 20 states. Anthem is currently the fifth-largest MA payer in the U.S., with 1,493,268 enrollees, a 16% increase from last year.

Source: AIS’s Directory of Health Plans

Health Plans on ACA Exchanges May Be Underpaying MLR Rebates

March 30, 2021

Health insurers on the Affordable Care Act (ACA) exchanges are consistently overestimating the amount they spend on enrollee benefits as part of their medical loss ratio (MLR) reporting, resulting in “hundreds of millions of dollars in underpaid policyholder rebates,” according to new research.

The ACA requires health insurers in the individual/small-group markets and large-group markets to spend at least 80% and 85%, respectively, of their premium income on medical care and quality improvement initiatives. If the percentage falls below those thresholds, insurers in those markets must pay a rebate to customers, and rebates have been rising considerably in the last three years, according to the Kaiser Family Foundation.

NOTE: The abstract below is a shortened version of the Health Plan Weekly article “ACA Exchange Insurers Could Be Gaming MLR Rebate System.”

By Leslie Small

Health insurers on the Affordable Care Act (ACA) exchanges are consistently overestimating the amount they spend on enrollee benefits as part of their medical loss ratio (MLR) reporting, resulting in “hundreds of millions of dollars in underpaid policyholder rebates,” according to new research.

The ACA requires health insurers in the individual/small-group markets and large-group markets to spend at least 80% and 85%, respectively, of their premium income on medical care and quality improvement initiatives. If the percentage falls below those thresholds, insurers in those markets must pay a rebate to customers, and rebates have been rising considerably in the last three years, according to the Kaiser Family Foundation.

But according to research that is slated to be published in The Accounting Review, insurers could have been paying far more in rebates. Looking at MLR filings from 2003 through 2014, researchers found that in cases where firms had the incentive to manipulate their reports — such as when they would have to pay out rebates — 63% of firms overestimated claims, compared to 49% of firms with no such incentives. “Thus, we infer that approximately 14 percent of firms with the incentive to manipulate do so,” wrote study authors Evan Eastman of Florida State University, David Eckles of University of Georgia, and Andrew Van Buskirk of Ohio State University.

Katie Keith, an attorney and research professor at Georgetown University’s Center on Health Insurance Reforms, says she is “not really surprised” by the study’s findings. “[With] any of these programs where it pretty much relies on insurer reporting, there’s an incentive for many to game the system,” says Keith, who was not involved in the study. “I’m not saying all of them game the system, but you don’t even just see it in the commercial market, you see it in Medicare Advantage and all these other systems, too.”

Krutika Amin, an associate director for the KFF’s Program on the ACA, says the COVID-19 pandemic’s generally positive impact on insurer finances has already heightened the likelihood that the sector will face increased regulatory scrutiny. “So I think there is definitely a conversation coming up around updating MLR requirements,” she tells AIS Health.

Health Care Spending Could Be $350B Less If Private Insurance Uses Medicare Rates

March 26, 2021

Total health care spending for the privately insured population could drop by an estimated $352 billion in 2021 if insurers reimburse health care providers at Medicare rates, a 41% decrease from the $859 billion in projected private health insurance spending this year, according to a recent Kaiser Family Foundation analysis. Nearly half of the total savings would be on outpatient hospital services, while inpatient services would account for 27% of the reduction. About one-third of the savings ($115 billion) would come from adults ages 55 to 64. On average, per-person health care spending for adults ages 19 to 64 with private insurance would be an estimated $2,096 less if Medicare rates were applied. For people ages 55-64, the potential reduction per person would reach $3,944 on average.

by Jinghong Chen

Total health care spending for the privately insured population could drop by an estimated $352 billion in 2021 if insurers reimburse health care providers at Medicare rates, a 41% decrease from the $859 billion in projected private health insurance spending this year, according to a recent Kaiser Family Foundation analysis. Nearly half of the total savings would be on outpatient hospital services, while inpatient services would account for 27% of the reduction. About one-third of the savings ($115 billion) would come from adults ages 55 to 64. On average, per-person health care spending for adults ages 19 to 64 with private insurance would be an estimated $2,096 less if Medicare rates were applied. For people ages 55-64, the potential reduction per person would reach $3,944 on average.

NOTES: Data results do not include changes in administration costs or loading fees. Other spending categories include laboratory, urgent care and skilled nursing facility.

SOURCE: “Limiting Private Insurance Reimbursement to Medicare Rates Would Reduce Health Spending by About $350 Billion in 2021,” Kaiser Family Foundation. Visit https://bit.ly/3dZcZ2J.