JustCare

Tag: Transparency

  • Why can’t people know their health care costs before receiving care?

    Why can’t people know their health care costs before receiving care?

    Health care should not be a commodity; it should be a right. But, so long as our country treats health care like a commodity, people should be able to know what they’ll be charged before receiving health care. Instead, it feels as if hospitals and physicians can make up their charges and insurers can make up what they cover; patients have little choice but to pay what they are billed or end up in medical debt.

    At a recent Senate hearing, policy experts explained why the current health care system isn’t working. Hospitals are supposed to post their prices, but many still don’t and, honestly, it probably would be of no help to patients if they did. The issue is not simply the costs of different services, but which services are delivered, over both of which patients have little control.

    The only solution for protecting people against high health care costs is an all-payer rate-setting system with regulated prices and public health insurance that covers them. Medicare for all. Once corporate insurers are in the mix and hospitals and physicians can charge what they please, as we know, your health care costs can be through the roof.

    The Senate Special Committee on Aging heard from witnesses about how impossible it is for patients to shop for health care effectively. Senator Mike Braun called provider behavior monopolistic. But, his solution, explained in a report, is simply for more price transparency, which will never address the problem of high prices.

    Hospitals also now get away with charging “facility fees,” which can be super high and are always unpredictable. Moreover, consolidation in the health care space is driving up prices, without any evidence of improved quality of care. But, Congress remains unwilling to address health care costs in a meaningful way.

    Congress did cap prescription drug costs for people with Medicare Part D at $2,000 a year beginning in 2025. But, that legislation continues to allow pharmaceutical companies to charge what they will for their prescription drugs. That’s not a meaningful solution. It will drive up Part D premiums further.

    For their part, hospitals argue that they need to increase prices because insurers too often refuse to pay them for the services they deliver. In addition, many patients can’t afford to pay their hospital bills, so hospitals are forced to absorb the cost of the services they deliver.

    Here’s more from Just Care:

  • Hospitals still not disclosing their prices, violating the law

    Hospitals still not disclosing their prices, violating the law

    Since January 2021, hospitals have been required to post their prices. While this recent legal requirement is not likely to bring down costs, it is helpful for understanding hospital pricing. But, hospitals continue to flout this requirement and instead choose to keep their prices secret. Aditi Ramaswami reports for The Lever on hospitals’ failure to comply, based on new research.

    The idea behind the requirement for hospitals to post their prices is that it would promote competition and help people price shop before going to a hospital. On its face, that’s absurd. People go to the hospital in their community or where their doctors work or which their doctors recommend. And, for the most part, people have no clue or control over what services they will receive in hospital in addition to the principal service they go in for. The cost of those ancillary services add up quickly. Moreover, a lot of the time people end up in the hospital as a result of an emergency, for which they could not plan.

    So, the provision in the Affordable Care Act requiring hospitals to post their prices–even if done in a consumer-friendly way–is not likely to make health care more affordable. And, hospitals are not complying with their obligations.

    CMS reports that halfway into 2021, fewer than one in 18 hospitals were making their prices available for public scrutiny. The Lever reports that many states have hospitals charging patients more than three times Medicare rates.

    Health and Human Services Secretary, Xavier Becerra, committed to ensuring that hospitals comply with the requirement to disclose their prices, when he was confirmed. But, how? HHS can impose fines on hospitals, but it has failed to do so, except in two Georgia hospitals.

    Meanwhile the hospital trade association, the American Hospital Association (AHA), sued to block the federal government from implementing this provision. The AHA made the laughable argument that disclosing hospital prices would undermine competition. The hospitals themselves make the laughable argument that it would cost them too much to implement the provision–as if it’s OK for people not to know hospital prices or as if price information is not stored on a computer system and easily accessible for hospitals to use for billing purposes.

    What’s more concerning is what the hospitals’ non-compliance says about hospitals’ ability to manage care and otherwise take proper care of their patients. Something as simple as reporting their prices should not present a challenge to any hospital, let alone the largest hospitals. For the biggest hospitals, some experts suggest the reason for nondisclosure is financial–concern about not losing revenue. Moreover, experts say the fine for non-compliance is less costly to hospitals than complying.

    Colorado is working hard to impose a penalty on hospitals that helps ensure compliance. There’s a bill in the state legislature, which passed with bipartisan support, despite heavy lobbying against it by the hospital trade association, that would prohibit hospitals from sending unpaid patient bills to collection agencies unless they are in compliance with the federal price transparency law.

    Here’s more from Just Care:

  • Members of Congress urge administration to end overpayments in Medicare Advantage

    Members of Congress urge administration to end overpayments in Medicare Advantage

    If you have traditional Medicare, you are paying higher Part B premiums to cover higher costs in Medicare Advantage. The Centers for Medicare and Medicaid Services is paying Medicare Advantage plans substantially more than it is spending in traditional Medicare. Congresswomen Katie Porter, Rosa DeLauro and Jan Schakowsky, along with Senator Elizabeth Warren, are leading an effort to end these overpayments in Medicare Advantage.

    In total, 19 members of Congress signed onto a letter to Administrator Chiquita Brooks-LaSure, urging her to end overpayments in Medicare Advantage, which are bolstering insurer profits at significant cost to the integrity of the Medicare program, taxpayers, and people with Medicare. The letter recommends that payments to Medicare Advantage be on a par with payments in traditional Medicare. And, it calls on CMS to increase transparency in Medicare Advantage.

    Overpayments in Medicare Advantage not only drive up costs for people in traditional Medicare, but threaten the Part A Hospital Insurance Trust Fund. Even though Medicare Advantage plans spend significantly less on enrollees’ care than traditional Medicare, they are allowed to pocket huge profits at great cost to the Medicare Trust Fund as well as taxpayers.  The Congressional letter explains that “Unless CMS addresses overpayments, public funds will continue to finance private profits at the expense of taxpayers, as well as older adults and disabled individuals on Medicare.”

    Traditional Medicare remains more cost-effective than Medicare Advantage. When launched, Medicare Advantage plans were expected to cost no more than 95 percent of traditional Medicare. “But Medicare Advantage has failed to achieve savings in any year since its inception,” the letter goes on to say.

    The members of Congress seek to work with CMS to achieve greater savings, transparency and value in Medicare Advantage.

    Warren, DeLauro, Schakowsky, and Porter were joined by Senators Sherrod Brown (D-OH), Bernie Sanders (I-VT), Patrick Leahy (D-VT), and Cory Booker (D-NJ), and Representatives Mark Pocan (D-WI-02), Pramila Jayapal (D-WA-07), Raúl M. Grijalva (D-AZ-03), Sheila Cherfilus-McCormick (D-FL-20), Judy Chu (D-CA-27), Jesús G. “Chuy” García (D-IL-04), Jahana Hayes (D-CT-05), Debbie Dingell (D-MI-12), Cori Bush (D-MO-01), Mondaire Jones (D-NY-17), and Rashida Tlaib (D-MI-13).

    Social Security Works, Just Care USA, Center for Medicare Advocacy, Indivisible, Physicians for a National Health Plan, and Public Citizen endorsed the letter.

    To read the full text of the letter, click here.

    Here’s more from Just Care:

     

  • How Connecticut Eliminated Capitated Managed Care in Medicaid

    How Connecticut Eliminated Capitated Managed Care in Medicaid

    A talk presented by Sheldon Toubman, then with New Haven Legal Assistance Association edited Transcript – February 2019

    In 2012, Connecticut replaced managed care organizations (MCOs) in its Medicaid program with a program of “managed fee for service”. Enhanced care coordination for all Medicaid recipients became an important part of this program, which has reduced Medicaid spending and provided better service to patients. In this talk, presented to the PNHP-NYMetro Research/Study Group, Sheldon Toubman, then at New Haven Legal Assistance, describes the process by which it happened.

    I have been a legal aid lawyer with New Haven Legal Assistance for almost 28 years and other programs for three years beyond that [since August 2021, Toubman moved to Disability Rights Connecticut]. For most of that time, I have been focusing on the Medicaid Program.

    In that role, I came of age in Medicaid advocacy in Connecticut in 1995 as the state was moving from the traditional Medicaid fee for service program, where the provider provides the service and they then bill for the service, to what other states were increasingly doing at the time, a capitated managed care system in which the state pays a fixed amount of money per member per month for health care services.

    I will give you the background of what we had in Connecticut, the strategy that advocates came up with, and then where we are today. It was seven years ago, January 2012, that Connecticut made the transition to what I call “managed fee for service”, or single payer. We’ve now had seven years of experience and I can tell you exactly what we’ve gotten for our money. Recognize that Connecticut is rather unusual. There are only four states that don’t have capitated managed care running their Medicaid program as you do in New York.

    So, when the capitated managed care model rolled out, there were eleven MCOs, Managed Care Organizations. We were told that the state was going to save money by paying them 95% of what we would otherwise have paid for the same health services under Medicaid. You won’t be surprised that the managed care industry managed to convince the state not to reduce its fees, but to pay it 100% of current spending. And you’ll not be surprised to hear the industry said that actually it’s not getting enough, so it needs more money, even though the whole premise was that it’s going to save money. (I should say that this was for our family and children population, not the elderly and disabled population, which is a sicker population; generally, family, kids and pregnant women are healthier populations. That is the group that was in the managed care system.)

    This dynamic started right away — they were always demanding more money, but the state had become dependent on them.

    The MCOs also argued that they were going to improve care because they are uniquely in a position to coordinate care. This is especially noteworthy because there is always a complaint from Medicaid recipients that their care is uncoordinated, that they see a lot of different doctors and nobody is watching out for them. So MCOs would say they’re going to coordinate care so that the state saves money, improves access to care, and thus improves the quality of care.

    However, in practice, what we saw constantly was routine lack of access to services. It was horrendous in the case of behavioral health, where kids who had been abused would be told they get a limited number of sessions and, if their provider was willing, they could beg for more. These abusive practices were partly a function of the fact that the MCOs subcontracted with other capitated insurance companies, so if the MCO was getting, say, $200 a month for all health care, they could contract for $11 a head to a specialized for-profit company to provide behavioral health, and those companies were even worse in restricting access to care.

    The basic problem with capitated MCOs is the same as with commercial insurance: every dollar of health care they provide comes out of their pocket. So the incentives were pretty obvious. Their messaging in response was always, along the lines of: “Don’t worry about that. Yes, it seems that way, but if they get sick, it’s on our dime. If somebody’s not taken care of and they end up in the hospital, we have to pay for that. So we have a real incentive to coordinate care and make sure that bad things like that don’t happen. We’re going to keep people healthy.”

    The reason that was false is, first of all, these are mostly for-profit, publicly-traded companies. All they care about is how well they’re doing this quarter. So if they can keep someone’s diabetes under control and keep them out of the hospital next year or the year after, that’s interesting but it’s not relevant to what they’re trying to do. They’re trying to profit right now.

    Second, people move from one plan to another, and so it may save money only for another plan, so they don’t see the benefit. The consequence is that they never did the things they said they would do. They never coordinated care. They never did the kinds of things that were necessary to prevent complex conditions from developing. And even on basic measures, like the Early and Periodic Screening, Diagnostic and Treatment requirements of federal Medicaid law, they were doing abysmally.

    And then there was dental access, which was terrible. There was pharmaceutical access, which was terrible. At some point, advocates decided that the basic financial model, where they make money by denying care, was just not going to work. There was no way we were going to reform that basic economic model and make it work for our clients.

    We started with a lawsuit. In 1999, we filed a class action suit against HealthNet and the state, which is ultimately responsible for all Medicaid services even if contracting with MCOs. Our specific allegation was that they were not compliant with due process. They were constantly denying services, but patients were not getting written notice of it. They learned about it because their doctor would say, “I tried to get approval, but they wouldn’t grant it.” There was no written notice to the patient of what the decision was, why it was decided and, more importantly, their right to appeal. These basic rights apply to all state and federal government benefit programs.

    So we brought a lawsuit saying they weren’t providing written notices and in the few cases where they did, the notices were grossly defective. For example, in one case the reason given for being denied was you don’t meet our company’s criteria, unspecified.

    One of the things we uncovered is that, routinely, people would be denied drugs which were covered under Medicaid and therefore covered under these contracts with MCOs. When they were denied, even when they were sent the written notice, it said the drug is not covered for you, which was not true. The drug was simply not on their formulary, which means the prescriber had to go through prior authorization, but it didn’t say that. It was basically a substantive access issue created by misrepresentation of the rules. So our lawsuit included this issue.

    One of the things we did with the lawsuit was to get a lot of media attention. This was the first class action suit ever brought in this country against a Medicaid-contracted insurance company. (Most of the time, people just sue the state; they don’t sue the insurance companies.) Press was really important because insurers really care about bad publicity. They are in a competitive marketplace, especially if they’re in the commercial sphere as well as the Medicaid world. They worry about their name, and their brand. They don’t want to be associated with problems. So we did a lot of press focusing on one MCO, but we also talked about problems with other MCOs as well.

    Advocates emphasized that this system is a black box. No one can tell what they are doing. We know people are routinely being denied service, because they come to our office and tell us that. Getting data on dollars and numbers of denials was really difficult, and the state couldn’t even get the information. So, one of the things that happened that we were involved in was finding some other avenue.

    We started focusing on recipients’ lack of access to providers, meaning that they just couldn’t find one. They couldn’t find a cardiologist, a neurologist. Various specialties just didn’t take Medicaid under any plan. This was a huge issue, related to low payment rates, i.e., specialists were being paid too little by the MCOs. So we wanted to get information about the rates paid. Someone filed a request under the state’s Freedom of Information Act, the open records law, asking for the payment rates for each of certain kinds of specialists, for each of a set of codes, for each of the MCOs.

    The state responded saying, essentially, “We don’t have that data and the Freedom of Information Act applies only to what’s in the possession of the state.” The state correctly said, “We don’t have the rates that the docs are being paid.” But we have in our state law, special to Connecticut and maybe to Pennsylvania, that a large, privately-owned contractor which is providing at least $2.5 million a year in services and is essentially performing a “governmental function,” that is, it taking on a role of government, is subject to that law. And that was really easy to show because the elderly and disabled populations in Medicaid were not in managed care, so all the things that the insurance companies were doing for the family population, the state itself was doing for the elderly and disabled populations, i.e., MCOs were performing that same governmental role. So advocates crafted a second Freedom of Information Act asking for the provider rates directly from the MCOs.

    In addition, parallel to the request for MCO provider rate information, advocates got involved in trying to get information about the numbers of pharmacy denials for lack of prior authorization. One of the ways insurances companies block access to drugs is they impose extra burdens and quantity limits for medication requests. We wanted to know how often does that happen. So we made a FOIA request essentially saying to the state, “If you don’t have the data, please get it from the MCOs. They have to provide it under the FOIA because they’re performing a governmental function in running a portion of the Medicaid program in general, and providing prescription drugs in particular.”

    This caused a firestorm. Initially, the state denied that the MCOs were performing a governmental function. We appealed that denial to the Freedom of Information Commission which enforces our open records law. It was a standing room-only hearing because the entire industry was really worried that we were going to have a situation where private parties would be subject to the law, and a Freedom of Information Act request could be submitted by anyone. That’s a scary thought if you’re a corporate entity

    Advocates got great media coverage about this, because the messaging was that these entities didn’t want to be accountable for how they spent the taxpayers’ money. They just want to take the money and not be accountable. And advocates said the state officials don’t want to hold them accountable either.

    We won before the Freedom of Information Commission, but it was appealed to the superior court by some of the MCOs. The state Attorney General then joined the side that was going after managed care organizations, which really annoyed the state agency. In any event, while this was pending, we put pressure on the governor, and there were op eds and editorials saying, “Yes, you should hold these state contractors accountable.” It got to the point where the governor gave up and said to the MCOs, essentially, All right, you’re going to be bound by this obligation, no matter what the courts say. You’re taking hundreds of millions of dollars in taxpayer money, so you should be accountable and we’re going to put it in the contract. Several of the big MCOs balked, so the governor pulled the trigger and basically said, “Okay, fine, you’re out of the program, but in the meantime, we’re going to turn you into non-risk entities.” That is, they would be administrative service organization contractors, not insurance companies taking financial risk. This was really important because this is what advocates wanted, and ultimately what they got, but not at this point. It was just temporary.

    The governor also said she was going to find other insurers which would accept this FOIA requirement. At about the same time, she decided to create a new subsidized program for lower income but non-Medicaid recipients called Charter Oak Health Plan, and she needed insurance companies to run it despite the uncertain costs of this new population. She went to the insurance companies and said, basically: If you agree to run my Charter Oak plan and take the risk, we’ll give you this very lucrative business of Medicaid clients. An RFP went out, and it did include that the insurers would be accountable under the Freedom of Information Act and they got three bidders. So, the three bidders agreed to contract on a risk basis, and advocates were back to square one, after they thought they had won.

    Advocates then started exploring how much the new companies were being paid. Whatever capitated rate the state pays a Managed Care Organization has to be approved by the federal Medicaid agency, and so they have to be audited. (Half or more of the state money paid to MCOs is actually federal money.) Advocates felt that the rate that the auditors found was acceptable was actually excessive. The state Comptroller then contracted with an accounting firm to come in to audit the auditors. They found the payments to the MCOs were at least $50 million/year too high. Advocates concluded they were being paid excessively through what was essentially a legal bribe from the Governor, to get them to run the Charter Oak business, which was her priority.

    Another thing that was happening under the earlier set of MCOs was that a group of pediatricians was focusing on the Medicaid provider network and the fact that it appeared to be bogus. That is, the list of doctors and other providers listed by the plans on their websites were not real, practicing providers or they were real people but were not really participating in the plans which listed them. So, these folks pushed to get a “secret shopper” survey done, where people got dummy Medicaid ID numbers and called up real providers and tried to set up real appointments for real medical problems. It was fictitious, but it sounded real to the office they were calling. The results were really disturbing and eye opening. For all of the MCOs, only about 25% of the time could people get an appointment, and the vast majority of times, the provider said, “I’m not participating in Medicaid” or “I’m not participating in Medicaid under your plan,” or “I’m not participating for new patients.” So, the vast majority of the time, the lists were bogus.

    This was really important because, about the same time this study came out, we finally received through the FOIA effort the provider rates that the MCOs were paying. Though they always claimed that they paid generously, it turned out they were mostly just paying the same low Medicaid rates already paid by the state under the rest of the Medicaid program. So the suspicions appeared to be correct that the reason specialists wouldn’t see these folks was because of the low rates.

    In addition, under the last set of MCOs, we started uncovering more misrepresentation of drugs being not covered when, in fact they just required prior authorization. Two very different reasons. When electronically denying drugs, two of the MCOs chose not to use the code which states the drug required prior authorization, which was the case, and, instead, used a code which said the drug was not covered at all. We emphasized that the MCOs were committing a kind of fraud, misrepresenting what is covered under the plan. So even though they were now subject to the Freedom of Information Act as a matter of contract, they were still misrepresenting what their coverage was in order to cut corners.

    At this point, advocates decided to offer an alternative, saying something like, “You know, this is not working. This capitated managed care for poor people is not working. Maybe we should do what some other states are doing.” The federal Medicaid statute offers an alternative type of managed care that doesn’t involve capitation at all. It’s called Primary Care Case Management. What this means is the state pays primary care providers extra to manage care. The MCOs always claim to manage care, but we all know they only manage cost.

    So, advocates suggested that Connecticut adopt, at least on a pilot basis, what other states like North Carolina and Oklahoma were doing, which is to pay primary care providers directly to coordinate care or manage care, paying them to actually coordinate care in a meaningful way. Advocates got a pilot plan through the legislature. It was very small, and the state Medicaid agency did not want to implement it, but advocates made a lot of noise about the fact they were not implementing it.

    Then, in 2010, we had a governor’s race. Advocates educated all of the candidates about the problems of managed care and we pointed out that this Primary Care Case Management (PCCM) model seemed to be working well in other states. We think that we should basically ditch this whole experiment with insurance companies. When Governor Malloy won in 2010, he set up various committees to develop issue briefs, and advocates lobbied those groups to lay out the PCCM option, emphasizing that capitated managed care wasn’t working, and was quite expensive.

    So, three weeks into his administration, in early 2011, Governor Malloy announced that he was going to show the door to the MCOs and adopt some form of Primary Case Care Management, using primary care providers to coordinate care, and also contract with an Administrative Service Organization (ASO), as the insurers had temporarily been turned into over the FOIA dispute. The ASO would take on some of the role that insurance companies play, but not on a risk basis, handling things like prior authorizations, recruiting providers, and so on. Behavioral health and dental services were contracted to different ASOs to manage those services, respectively, also on a non-risk basis.

    That announcement was made in February 2011, and an RFP was issued not too long thereafter. Connecticut chose a non-profit entity, Community Health Network of Connecticut, to take on that role. It used to be a not-for-profit, capitated MCO, and it was now being turned into an ASO.

    We then got involved in advocating for what the patient-centered medical home (PCMH) requirements were going to be for the PCCM-like program, because we were really going to use those to manage or coordinate care. We had to beef up the requirements on primary care providers and went with National Committee for Quality Assurance (NCQA) accreditation of PCMHs as the standard. They had to be accredited as a patient-centered medical home in order to participate and get paid extra for doing care coordination.

    That’s the basic history. Now, I want to fast forward to where we are today. It has not been absolutely perfect. There have been problems. But, overall, it has been a dramatic improvement, and the materials that have been distributed tell the story. Just in the hard dollars, in per member per month cost. (You don’t look at total costs under the Medicaid program in part because our program, like that of all the blue states, did a Medicaid expansion and those total costs have gone up substantially because there are a lot more people covered. Connecticut Medicaid member per month costs are down 14% from $706 in the first quarter of 2012 to $610 in the first quarter of 2018. So, that’s six years, and the costs went down. As a result, Connecticut, which is one of the highest health care cost states in the country — our per-enrollment costs had been the 9th highest, now they’re 22nd. So, we’ve actually done very well through this model in terms of total per member per month costs: To have costs go down when, in every state that has managed care, they always demand more money. To not have that hanging over you, if you’re a state agency, it’s pretty nice that you actually have control of the cost.

    The other question is, how much of those total costs are actually going to health care? As we all know, there are huge administrative costs that go into the private risk-based insurance system. When we had managed care companies, it was hard to get the data, but we found routinely 20%, even 25% or higher administrative overhead. We actually saw about 40% at one point for administrative costs for one of the plans, under the CHIP program. Based upon the data that has been available now for a few years, we have done really well on both the total costs and the medical loss ratio, which is now about 96.5% [97% as of 2021]. Only 3.5 cents on the dollar goes to administrative costs, paying for the ASO and the state’s own administrative costs. The rest is all going to health care. So it’s a win-win in terms of the cost and where the money goes.

    We really care about quality, about access to care. The data there is pretty good as well. Some really basic stuff like significant increases in preventive care, 16.3% from 2015 to 2017, hospital admissions per thousand down 6.29%, readmissions down 3.52%.

    There are several reasons, but one of them is the use of patient-centered medical homes. Close to half of our Medicaid population is now attributed to accredited patient-centered medical homes. They have the infrastructure for adequately coordinating care so people don’t end up in the hospital, and they provide routine care and the child visits and screenings and so on. Under the new system, the state has the data on what is being done and doesn’t have to beg an insurance company to give them the data.

    Though the primary responsibility for coordinating care lies with the primary care providers, the medical ASO (CHNCT) has done extra things to coordinate care. Their major program is called Intensive Care Management. This involves identifying people who are the frequent flyers, who go in and out of the ER frequently and need special attention, as well as individuals referred to the program. They have an aggressive outreach program where they literally go out to the people where they are in their community and try to get them in contact with their primary care provider. Ideally, it’s a patient-centered medical home, to make sure that going forward, somebody is actually looking out for the various issues they have — behavioral health issues, medication access issues, home care, whatever. The result is that, for their Intensive Care Management members, in 2017 the total cost of care dropped 12%.

    So, ER usage has gone down 25% and hospitalization dropped significantly. They actually have developed good programs to do the very thing which the MCOs always claimed they did but never actually did to actually coordinate care. If you do this, you keep people out of the ER and avoid readmissions, you save money. Again, tt’s not perfect, and we’ve got issues, but we think the system has worked to save money the right way, not by denying services but by providing better service.

    The last thing to point out is the handout “Medicaid’s Care Management program is saving lives and money, but savings may be going to PCMH+ ACOs.” ACOs, Accountable Care Organizations, are the latest thing that everybody who’s anybody in health policy is supposed to believe in as the answer to our problems with health care cost. ACOs put financial risk onto (generally larger) provider groups instead of insurance companies.

    The idea, mostly pushed in Medicare but now in Medicaid as well, is that you put provider groups at financial risk and they’ll somehow do the right thing, keep costs down but not in a bad way, not by harming access, denying services, denying referrals. Somehow, they’ll do it in the right way. To me, that’s frankly religion. It’s belief in a system that hasn’t been proven, that you can’t really prove and has been very controversial. Unfortunately, Connecticut has adopted a shared savings type of ACO program, called PCMH+, that is very different from patient-centered medical homes, PCMH without the “plus”. And the primary difference is the use of a shared savings payment model in PCMH+.

    If groups of providers respond positively to an RFP, they’re in a system where any of the money they save on the total cost of care of their own patients, using actuarial data and some risk adjustment, they get to keep half of. Advocates are very concerned. We have one year of data now, and it suggests that this is not saving money and may be harming access to care. We don’t know where that’s going at this point.

    The basic point about our system: under managed fee-for-service, the state maintains the risk, and is using both insurance companies on a non-risk basis to do certain administrative actions in a good way to meet the goals of improving care while keeping costs down, and PCMHs to coordinate care on a regular basis. There’s still an access problem with specialists because of low reimbursement rates.

    About 45% of the Medicaid population is within an accredited PCMH. It’s a little hard to know exactly what the PCMHs are doing in terms of care coordination, though we do have numbers that show they are doing better than non-PCMHs on most indicators.

    Costs have been relatively flat since we made the transition, suggesting that we are getting some decent care coordination for the elderly/disabled population as well for families with kids which had been in the capitated MCO system.

    At the time of the transition, there were three MCOs, Community Health Network of CT, Aetna, and UnitedHealth (CHNCT, the one non-profit, became the non-risk contracted ASO). For-profit entities have lobbied hard with successive governors to come back into the program on a risk basis, but we’ve managed to hold them off. It’s saving money, so that’s a strong argument for keeping what we have, and we’re also pointing out access and quality gains, as well as the high medical loss ratios. And, over time, the State Medicaid agency became very invested in the new program, which was producing good results.

    We tried to get consumers involved in designing and then advocating for the new program. However, it was very hard to get them engaged.

    It was important overall that advocates had a period in which the managed care organizations were revealed to have been doing bad things, violating the idea of transparency, resisting the Freedom of Information requests, essentially committing a form of fraud in terms of misrepresenting pharmacy coverage, etc. These were important in discrediting them as part of the story. Advocates never would have gotten what they got from the governor if they hadn’t done that. Although advocates could produce white papers saying to the candidates that they should do this or that, the reality is that the climate was what really mattered. They worked really hard at getting media to expose the shortcomings in the system, which changed that climate.

    Advocates didn’t have great data, because the MCOs kept their cards close to the vest. So it was really hard to produce actual numbers of denials or whatever. It was a challenge. Advocates basically said that state officials don’t want to hold huge state contractors accountable with our taxpayer money, so that is why we don’t have the necessary data, even as they had a lot of anecdotal stories of harm.

    In the absence of data, what do you do? You paint a picture based upon what you do have of an industry that is not capable of being reformed. And so advocates made the case that we should do an alternative, the non-risk form of managed care known as PCCM, saying essentially “Here’s another way to do it. It’s not radical. Other states are doing it. And it’s right in the federal Medicaid Act. It’s not a big deal.”

    You can’t win this battle on the basis of the money wasted on risk-based insurers alone. Advocates did a lot of outreach to providers, particularly in the behavioral health area, to develop individual stories of abuse. Advocates learned the techniques the MCOs were using to deny services, the games they played. So they produced a survey which said, “Have you seen this?” We had a one-page referral form and said, don’t give us the name of the client, but do you have a client who has experienced this and if so, please tell us what’s going on. The horror stories were just unbelievable. Advocates emphasized these kids’ cases, and got media attention which was very sympathetic.

    Having providers know we were looking was very important. When advocates met with some of them, they said, “We’ve been looking for a way out for years. We needed you,” or words to that effect, so the advocates’ names got around. And providers contacted them, and they worked together to tell their stories.

  • What will it take for Congress to cap hospital prices?

    What will it take for Congress to cap hospital prices?

    RAND just released a new study by Jody L. Liu confirming what multiple other studies have found: If the federal government were to put a cap on hospital prices, we could save tens of billions of dollars a year in health care spending. Two other proposals to rein in hospital prices, making hospital prices publicly available and promoting competition among hospitals, would not save anywhere near that much money. What will it take for Congress to cap hospital prices?

    I bet you know that the American Hospital Association was not happy with the RAND report. It points its finger at for-profit insurers.  But, as much as insurers are responsible for not being willing or able to rein in hospital prices and driving up health care costs, it is the hospitals that set the prices.

    In 2018, the US spent $1.2 trillion on hospital costs. Forty percent of total health care spending went to hospitals. If Congress regulated hospital prices so that everyone benefited from Medicare rates, savings could be as high as $236 billion a year. With hospital prices set at 150 percent of Medicare rates, savings would be $61.9 billion a year.

    States could take on regulating hospital prices, but, in the last several decades, only one state has been willing or able to do so in a meaningful way. Only Maryland regulates hospital prices.

    RAND does find some savings from hospital price transparency. It estimates that prices could come down by as much as $26.6 billion a year. And, it further finds that increased hospital competition–something at least as hard to achieve as federal price regulation and likely harder–could generate savings of between $6.2 and $68.9 billion a year.

    We need to keep reminding our members of Congress that health care will never be affordable if Congress does not regulate hospital and drug prices. Subsidies will never be high enough. And, pharmaceutical companies and hospitals will keep raising prices as long as they are allowed to do so.

    Yes, regulating prices might lead some hospitals to fold. But, our current free-f0r-all system has led many critical rural and other hospitals to shut their doors. Congress has the power to invest in hospitals where needed, as it has been doing throughout the pandemic, and it would be empowered to do so at any time if it regulated hospital prices.

    And, yes, regulating prices might lead drug companies to limit their research. But, a lot of their research goes to maximizing their profits, not to discovering new important treatments. If prices were regulated, Congress could use the savings to target investments to needed research.

    You can read a JustCare post explaining why competition does not bring down hospital prices here. And, this post discusses a RAND study that looks at hospital prices for corporate health insurers as compared with Medicare. One question for Congress is whether it wants to have hospitals suing patients for the cost of their care that insurance does not cover. Another question is whether it thinks that the wildly varying hospital prices even within a community should be addressed to protect Americans.

    Here’s more from Just Care:

  • Are hospitals posting their prices, as required?

    Are hospitals posting their prices, as required?

    Beginning this year, hospitals are required to be transparent about the prices they charge different insurers for their services. But, Samantha Liss reports for HealthcareDive that hospitals are not being transparent about their negotiated prices. Why would they post their prices when the potential penalty is a mere $300 a day or a corrective action plan, a flick on the wrist?

    As of January 1, all hospitals across the country must make their negotiated prices public, online. Until this year, virtually all hospitals claimed this information was proprietary, a business trade secret. There was no requirement for price transparency.

    Hospitals that are complying with the transparency policy are burying information about their rates on their web sites or are not providing complete information. Researchers cannot find it. There is no single designated place for this information.

    The Centers for Medicare and Medicaid Services (CMS) is overseeing this effort. But, CMS does not post the information. It is not even collecting it; hospitals are not required to send CMS the information. There is no simple way to know which hospitals are complying and which are not.

    When the hospital price information is available, it is not likely to help individuals compare prices right now. Over time, if you’re shopping for insurance, you might be able to see which insurers are able to negotiate the best rates from the hospitals you want to use. Of course, that does not tell you whether the insurer has inappropriately high denial or mortality rates, two other factors that people should be able to consider when choosing a health plan but for which there is no information.

    The hospital price information currently available reveals what we already know. The prices vary tremendously for the same service. According to Niall Brennan, head of the Health Care Cost Institute, one insurer might pay $5,000 for a C-section and another $55,000. Neither Congress nor president-elect Joe Biden is even talking about fixing this huge problem that drives up insurance premiums and out-of-pocket costs and jeopardizes access to care.

    The American Hospital Association fought hard against hospital price transparency. But, it ultimately failed. A federal appeals court wouldn’t intervene to block the policy from going into effect. The American Hospital Association tried to say that some prices are unknowable. Really? Do the hospitals make them up as they go along?

    Here’s more from Just Care:

  • Beginning in 2021, standard hospital charges go public

    Beginning in 2021, standard hospital charges go public

    Judith Garber writes for the Lown Institute on out-of-control hospital prices. The Trump administration’s “solution” is to require that hospitals inform patients in advance about standard charges for the care the hospital will provide them. Transparency is a good thing. But, making standard hospital charges public is not likely to lead to lower prices.

    Soaring and unchecked hospital prices, combined with soaring and unchecked prescription drug prices, are driving up our health care premiums and out-of-pocket costs dramatically. Large numbers of Americans are skipping needed health care services or skipping their dinners to try to pay for their healthcare because it is so costly, even with insurance. But, there is almost no indication that Congress will do anything to rein in these costs in the coming years.

    Of course, the hospitals have lobbied hard to prevent any Congressional action that would shed light on their charges, much less that would regulate the prices they charge. In fact, they have filed lawsuits to block the administration’s rule requiring disclosure of charges. It seems that those efforts have been unsuccessful. The regulation requiring hospitals to disclose their rates goes into effect in January 2021.

    Today, about a third of all health care spending each year is for hospital care–$1 trillion. What’s most troubling about hospital charges is that the data suggests that, as with drug prices, there is little relationship between a hospital’s charges and a hospital’s costs. According to National Nurses United, in 2018, on average, hospital charges were four times higher than their costs.

    The 100 hospitals with the greatest disparity between costs and charges had charges that were 12 to 18 times higher than their costs. Not surprisingly, 95 of these 100 hospitals were for-profit hospitals. And more than 50 of them were part of the for-profit HCA hospital system.

    Among other troubling issues, when patients go out of network for their hospital care, they don’t benefit from the discounted rates insurers negotiate. They are charged a super-inflated rate. This is true for people who are uninsured as well.

    Moreover, uninsured patients who should qualify for financial assistance from the hospital, may not benefit from that assistance. The hospital may not even tell them about their eligibility for a lower rate.

    Many hospitals also discriminate against people of color. The data reveal that hospitals in communities of color charge higher rates for emergency department care than hospitals in other communities.

    The question is whether price transparency will help to drive down prices. Time will tell the answer. It’s not at all clear that either patients or policymakers will be willing to hold hospitals that profiteer accountable. If they don’t, it’s more than likely that more hospitals will raise rates and profiteer. That’s how competition seems to work in the United States.

    Here’s more from Just Care:

  • Hospital price transparency won’t make health care affordable

    Hospital price transparency won’t make health care affordable

    In our Kafkaesque healthcare system, people are told to make an “informed choice” of health insurance when not even the prices private health insurers pay hospitals are transparent. Beginning in January 2021, hospitals might be required to disclose publicly the prices they charge private health insurers, but that won’t make health care affordable or help people make a meaningful choice of health insurance. In sharp contrast, Medicare’s rates have always been publicly available; more important, costs are predictable and you can get the care you want.

    For decades, working-age Americans have had to choose almost blindly among health insurers, not having a clue as to what their copays would be if they needed complex care. Most people have relied on premium differences and provider network differences to make their choice. But, knowing that will not tell you your out-of-pocket costs if you develop a costly condition because hospitals charge private health insurers wildly different prices for people’s care.

    Most people do not realize that the differences in prices insurers pay could mean huge differences in their out-of-pocket costs if they need hospital care. Regardless, they have had no ability to see these prices. Until, perhaps, now. While hospital price transparency would be a step forward, it is not nearly enough to protect working people against high out-of-pocket costs. Unlike traditional Medicare, private insurers do not allow people to protect themselves against unpredictable costs with supplemental coverage.

    The US Department of Health and Human Services (HHS) is requiring hospitals to disclose their negotiated prices with insurers effective January 1, 2021. The American Hospital Association is fighting back, claiming that this requirement would violate hospitals’ First Amendment rights. As of now, the AHA is losing its lawsuit to keep hospital prices secret. The Judge in the case does not buy the First Amendment argument. Rather, he believes that disclosing hospital prices would empower patients to compare hospital prices.

    It’s not clear what good it would do patients to be able to compare prices. Hospital prices should be the same for everyone, much like restaurant prices and television prices. And, they should be reasonable. They should not be based on the hospital’s negotiating leverage with insurers, as they are today, which can drive prices through the roof. And, they should be public.

    But, disclosing prices will not rationalize them. For that, we need Medicare for All, which would ensure fair prices and guarantee everyone access to care with no out-of-pocket costs. At the very least, we need all-payer rate setting, with the government using the collective leverage of all Americans to negotiate the rates.

    Disclosing hospital prices might help people avoid some exorbitant health care charges. But, it will not help nearly as much as traditional Medicare helps, or Medicare for All, which has no copays. People have no control over how many doctors see them in the hospital or how many tests and procedures they receive. So, a hospital with higher prices could have lower total costs if it performs fewer procedures. There’s no way anyone could know that in advance.

    It’s time the federal government stopped proposing small bore fixes to out-of-control health care prices. Americans do not have choice when it comes to health care. It’s unaffordable. People face huge financial barriers to care. It is untenable and unconscionable. We need Medicare for All.

    Here’s more from Just Care:

  • Hospital prices should be disclosed, but knowing them won’t help you shop for health care

    Hospital prices should be disclosed, but knowing them won’t help you shop for health care

    A new Trump administration policy requires all hospitals to disclose their prices for people without insurance as a means to help people shop for health care. This policy will never help people save money or get needed care. Nor will it ease their stress about hospital costs. Without Medicare for All–which does away with deductibles and coinsurance–health care costs will remain a burden, forcing people to make choices about their families’ care that no one should have to make.

    Today, people with and without insurance have little clue what their out-of-pocket costs will be in hospital–unless they have traditional Medicare. Hospitals can hide the amounts they charge different insurers for different procedures; insurers, in turn, neither disclose nor limit people’s out-of-pocket hospital costs. People with commercial insurance are regularly surprised by how high they are.

    Hospitals rates tend to put patients at serious financial and health risk. Even with insurance, between deductibles and coinsurance, hospital costs are often beyond their means. Until we eliminate deductibles and coinsurance, the US will continue to ration care based on people’s ability to pay.

    For these reasons, the Trump administration policy requiring hospitals to disclose their charges for the uninsured is of little, if any, benefit to people. It provides no information for people with insurance. And, even if there were full hospital price transparency–information on rates for the insured and uninsured–it is hard to imagine how it would ever help people.

    In short, you should not be expected to shop for health care. You generally have little control over the services you receive in hospital. Moreover, hospital fees for a procedure are an amalgam of different provider charges. The surgeon’s fee might be lower at one hospital than another and the anesthesiologist’s fee higher. But, you could not very well go to one hospital for anesthesia and another hospital for surgery.

    Most important, price should not be the driving factor in choosing where to get health care services. Quality matters. You would never buy a car or a home without factoring in quality. You certainly should not do so with health care services. Yet, we have virtually no good public information available on quality of these services.

    To be clear, hospital price transparency is good public policy even if it cannot help patients. It allows policy experts easily to compare costs for different services, among hospitals, in a particular area, and across the country, for different health plans, and for people without insurance.

    Full hospital price transparency would reveal which insurers are getting better rates for different services and reinforce the point that the health care marketplace sets arbitrary and unreasonable prices and fails to rein in costs. It would expose lack of competition. And, it would help show why we need Medicare for All, fair rates for everyone no matter where they live or which hospital they use.

    Here’s more from Just Care:

  • State efforts to rein in prescription drug costs

    State efforts to rein in prescription drug costs

    The overwhelming majority of the public supports government intervention to bring down drug prices.  While the federal government is doing precious little about prescription drug prices other than holding hearings, states are acting in the somewhat limited ways they can. Thomas Huekskoetter of the Center For American Progress has a new report on state efforts to rein in prescription drug costs.

    Huekskoetter describes three types of state efforts to address prescription drug prices. One effort is to increase price transparency of drugs so that we can see how much drugmakers are actually charging middlemen and how much middlemen are hiking up the prices. Another effort strengthens the power of states to negotiate prices. A third effort attempts to reduce pharmaceutical company price gouging. All of them spotlight drugmaker abuses and help to galvanize the public and pressure Congress to act. It’s not clear whether any of them will have any effect in reining in prices.

    Drug price transparency itself will not bring down prices. But, it will expose and shame drugmakers. It is a good step forward in the fight to rein in prices. Nevada’s law focuses exclusively on insulin and requires drugmakers to justify significant insulin price increases as well as report manufacturing costs, marketing expenses and profits. In addition PBMs must reveal the rebates they get from drugmakers for insulin. And, advocacy groups must disclose any donations from pharmaceutical companies to expose the groups that are in the pockets of Pharma.

    California’s law is broader in that pharmaceutical companies must notify the state if they are raising list prices on their drugs by 16 percent or more over two years. And health insurers must disclose the amount that higher drug costs affect an annual premium increase. Oregon’s recent law largely piggybacks off of Nevada’s law requiring drug company expenses and profits reporting, but it is far broader, covering all drugs with annual price increases of 10 percent or more.

    This all said, Vermont has a price transparency law that has not been helpful at all, even though it requires pharmaceutical companies to justify certain drug price increases. For some reason, confidentiality rules made Pharma’s justifications inaccessible even to legislators.

    It is far harder for states to increase their negotiating power against pharmaceutical companies than to require some transparency. Maryland has been trying. But, so far, a bill to create a Drug Cost Commission to track prescription drug prices, especially for the most costly drugs, has passed only the House. The Drug Cost Commission’s authority would essentially be to issue reports on what they find and to recommend policy solutions. It is awaiting Senate passage.

    Massachusetts has proposed using a formulary for its Medicaid population as a way to secure greater leverage over pharmaceutical companies. The formulary would only cover certain drugs, relying on comparative effectiveness data on drugs as one way to determine whether Medicaid should cover a drug. Massachusetts’ waiver request to the Centers for Medicare and Medicaid Services makes the compelling case that because of the 21st Century Cures Act, “Many drugs coming to market through the FDA’s accelerated approval pathway have not yet demonstrated clinical benefit and have been studied in clinical trials using only surrogate endpoints.” Understandably, Massachusetts does not want to pay for high-priced prescription drugs that are not found to have clinical benefits. It is not at all clear that the Trump administration will approve the request for a waiver.

    New York passed a law that imposes a drug spending cap for Medicaid. The law requires state Medicaid officials to renegotiate rebates for high-priced drugs responsible for substantial Medicaid drug spending that could trigger the drug spending cap.

    Some states are also trying to address pharmaceutical company price gouging–big increases in drug prices from one year to the next. But, that is a big challenge. A Maryland land focused on penalizing drugmakers for excessive generic drug price increases was found to violate the dormant commerce clause of the US Constitution by the 4th US Circuit Court of Appeals. If Maryland or another state can succeed in implementing a law of this type, every other state likely would benefit.

    Drug importation: Vermont now has a law that legalizes drug importation from Canada. But, the law requires the state health agency to design an implementation proposal for importation for HHS approval. And, it is unclear what HHS will do.

    Setting state agency drug prices at same level as US Department of Veterans Affairs: The pharmaceutical industry was able to defeat this ballot initiative in both California and Ohio, spending $109 million in California and $60 million in Ohio.

    If you want Congress to rein in drug prices, please sign this petition.

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    Now available: The Ten Should-Do’s for Your Health, Purse and Peace of Mind, Chapter One of Aging, Schmaging, by Diane Archer. For a $5 contribution, you can help yourself and the people you love; you can also help support Just Care.

    Here’s more from Just Care: