Category Archives: Out-of-Network

Paying for healthcare shouldn’t bankrupt families

Posted on by • Posted in 2020 Election Issues, ACA, Bad Debt Expense, Bankruptcy, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Premiums, High Prices, Out of Pocket Expenses, Out-of-Network, Preexisting Conditions, Short Term Health Insurance, Surprise Bills • Leave a comment

https://www.modernhealthcare.com/opinion-editorial/paying-healthcare-shouldnt-bankrupt-families?utm_source=modern-healthcare-daily-finance&utm_medium=email&utm_campaign=20190923&utm_content=article4-readmore

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Healthcare costs in the U.S. are too high. Americans struggle to afford basic needs like prescription drugs and too often face crushing surprise bills after undergoing necessary medical procedures. Seniors in particular feel the weight of health expenses when they discover that the Medicare benefits they earned don’t always provide sufficient coverage.

While the Affordable Care Act instituted protections for Americans with pre-existing conditions, guaranteed essential health benefits and made some progress in lowering patients’ costs, those advancements are under attack in the courts and through regulatory actions. I chair the House Ways and Means Committee, which has jurisdiction over a great deal of our nation’s healthcare system, including Medicare. Under Democratic leadership, we are fighting to bring down healthcare costs and preserve critical existing health protections.

Our committee hit the ground running this year. The first hearing I convened as chairman focused on protecting Americans with pre-existing conditions. Nearly 130 million Americans have a pre-existing condition—anything from asthma to cancer to diabetes. Thanks to the ACA, insurance companies can no longer refuse to cover these individuals. The hearing shed light on the importance of this safeguard and the ways it provides Americans with greater peace of mind and financial security.

We also highlighted the immense pain families will endure if 18 Republican state attorneys general succeed in their case to repeal the law.

House Democrats, along with Democratic state attorneys general, jumped into this court battle and continue to defend the millions of Americans with health conditions from discrimination and financial ruin.

We also took concrete steps to increase transparency and lower drug prices. Ways and Means advanced legislation that sheds light across the healthcare supply chain—from pharmaceutical manufacturers to pharmacy benefit managers—to help reduce costs for families. More can be done. In the coming months, the committee will consider legislation to improve the Medicare Part D program, establishing an out-of-pocket cap on expenses for beneficiaries. This would lower costs for seniors and save taxpayers money.

Part D reform is just one way to improve Medicare for beneficiaries. Many seniors aren’t aware that Medicare does not cover routine vision, hearing or dental exams. I will work to change that. Helping seniors access the glasses, hearing aids or dental care they need will save them money on the front end. This coverage will also prevent the trauma and expense of falls or other related health problems that could arise down the road as a result of inadequate services.

Some of the most jarring and devastating medical costs Americans encounter are surprise medical bills. Ways and Means plans to tackle this problem too. We are crafting legislation now that will help patients avoid the huge expenses that follow inadvertently being treated by out-of-network providers.

Healthcare is a necessity and it’s a human right. Paying for it shouldn’t bankrupt families. We can lower patient costs without stifling medical innovation or throwing hospitals into turmoil. It’s possible to achieve commonsense solutions that strengthen our nation’s healthcare system while reducing the burden on consumers.

 

On same day of hospital concentration study, AMA says payers are the ones with less competition

Posted on by • Posted in Antitrust, Health Insurance Industry, Health Plan, Health Policy, High Deductible Health Plans, High Premiums, High Prices, Market Consolidation, Market Power, Out of Network, Out of Pocket Expenses, Out-of-Network • Leave a comment

https://www.beckershospitalreview.com/payer-issues/on-same-day-of-hospital-concentration-study-ama-says-payers-are-the-ones-with-less-competition.html?oly_enc_id=2893H2397267F7G

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In 2018, 75 percent of commercial health insurance markets were highly concentrated, according to a study published by the American Medical Association.

For its study, AMA analyzed market concentration in 382 metropolitan areas across the nation. AMA estimated that 73 million Americans with commercial health plans live in highly concentrated markets and don’t have many health plans to choose from. 

“Americans in three-quarters of commercial health insurance markets have a limited number of health insurers from which to choose,” AMA President Patrice Harris, MD, said in a prepared statement. “In almost half of metropolitan areas, a single health insurer has 50 percent or more of the market, and patients are not benefiting from this degree of market power. While health insurers grow corporate profits, networks are too narrow, premiums are too high, and benefits are too watered down.”

The study was published the same day the Health Care Cost Institute published an analysis finding a growing number of metropolitan areas have highly concentrated hospital markets. HCCI found that by 2016, hospital markets in the majority (72 percent) of 112 metro areas the institute studied were highly concentrated. HCCI said this “reflects the fact that most metros became increasingly concentrated over time.”

Read the full AMA study here.

 

Report: 3 in 4 hospital markets are now ‘highly concentrated’

Posted on by • Posted in American Hospital Association (AHA), Antitrust, Harvard Global Health Institute, Health Policy, Health System, Herfindahl-Hirschman Index, High Deductible Health Plans, High Premiums, High Prices, Hospital, Hospital Industry, Market Consolidation, Market Power, Out of Pocket Expenses, Out-of-Network, Robert Wood Johnson Foundation, The Urban Institute • Leave a comment

https://www.fiercehealthcare.com/hospitals-health-systems/report-three-four-hospital-markets-are-now-highly-concentrated?mkt_tok=eyJpIjoiT1dJNE5tUTFZV0k1TVdRNCIsInQiOiJMakFtS1IzZmxaRDlQNUtjdFdMUHVYUFdBd1wvXC9EZFR3ekhHU3ZsYVNib2t3bTlEb0Z2bklLZndEZXFOTjZ1RVZ0bURYMXI5dGFNcW92SXFYV25HTVh4d01tNEY4YkVCUnBMamhpbllXSytVTW5ybGJ1OTh0UjJmVDRmSWJ6c1wveCJ9&mrkid=959610

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Nearly 3 in 4 hospital markets around the U.S. are “highly concentrated,” according to a new Healthy Marketplace Index report by the Health Care Cost Institute (HCCI).

Researchers examined more than 4 million commercial inpatient hospital claims between 2012 and 2016 and found 81 out of 112 (72%) were considered “highly concentrated” using the Department of Justice’s Herfindahl-Hirschman Index (HHI). That’s up from 67% in 2012. 

“Increasingly concentrated hospital markets have been linked to the rising cost of hospital care by nearly every expert in the field,” said Niall Brennan, president and CEO of HCCI, in a statement.

Funded by the Robert Wood Johnson Foundation, the report found:

  • 69% of markets studied experienced an increase in concentration.
  • Metro areas with smaller populations tended to have higher concentration levels. For instance, Springfield, Missouri; Peoria, Illinois; Cape Coral, Florida; and both Durham and Greensboro, North Carolina, had the most concentrated markets in the U.S.
  • Larger metropolitan areas including New York City, Philadelphia and Chicago had the lowest levels of concentration.
  • Some of the less concentrated metros in 2012 like Trenton, New Jersey, experienced larger increases in concentration over time.

“Our findings add to the growing consensus that most localities have highly concentrated hospital markets, and this is becoming increasingly true over time,” Bill Johnson, Ph.D., a senior researcher at HCCI and an author of the report, said in a statement. “The increased concentration we observed can be driven by many factors such as hospital closures, mergers, and acquisitions, changes in hospital capacity, patient preference, or changes in patients’ insurance networks.”

Previous, HCCI reports found inpatient hospital prices were rising in nearly every metro area studied. This new study found a positive relationship—but not a causal relationship—between price increases and increases in hospital market concentration. Those findings align with similar findings correlating consolidation with rising healthcare prices including from the Harvard Global Health Institute and the Robert Wood Johnson Foundation and The Urban Institute.

However, the American Hospital Association recently released its defense of consolidation in a report that argues mergers can improve costs by increasing scale, improving care coordination, reducing capital costs and improving clinical standardization.

 

 

 

Sutter Health faces class-action lawsuit over pricing: 4 things to know

Posted on by • Posted in Attorney General, Class Action Lawsuit, Health System, Lawsuit, Monopoly Behavior, Narrow Network, Out of Pocket Expenses, Out-of-Network • Leave a comment

https://www.beckershospitalreview.com/finance/sutter-health-faces-class-action-lawsuit-over-pricing-4-things-to-know.html?oly_enc_id=2893H2397267F7G

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A class-action lawsuit alleging Sutter Health violated California’s antitrust laws by using its market power to overcharge patients is slated to open Sept. 23, according to the Los Angeles Times.

Four things to know:

1. The lawsuit dates back to 2014. Self-funded employers and union trusts initially filed the case, which was later joined with a lawsuit brought in 2018 by California’s attorney general.

2. In March, California Attorney General Xavier Becerra said a six-year investigation revealed Sutter restricted health insurers from providing consumers with more low-cost health plan options, and the health system set excessively high out-of-network prices. Sutter also allegedly restricted publication of provider cost information, which impeded transparency.

3. Sutter could be liable for as much as $2.7 billion. The plaintiffs are seeking up to $900 million in damages, and that amount can be tripled under California’s antitrust law, according to the Los Angeles Times.

4. Sutter denies the allegations. Regarding the lawsuit, a health system spokesperson released the following statement to the Los Angeles Times:

“This lawsuit irresponsibly targets Sutter’s integrated system of hospitals, clinics, urgent care centers and affiliated doctors serving millions of patients throughout Northern California. While insurance companies want to sell narrow networks to employers, integrated networks like Sutter’s benefit patient care and experience, which leads to greater patient choice and reduces surprise out-of-network bills to our patients.”

Access the full Los Angeles Times article here.

 

 

 

Moody’s Outlook Darkens for Team Health

Posted on by • Posted in Credit Quality, Credit Ratings, Health System, Lawsuit, Out-of-Network • Leave a comment

https://www.healthleadersmedia.com/finance/moodys-outlook-darkens-team-health?spMailingID=16126344&spUserID=MTg2ODM1MDE3NTU1S0&spJobID=1701043585&spReportId=MTcwMTA0MzU4NQS2

UnitedHealth will cancel two-thirds of Team Health’s in-network contracts over the next 11 months.

KEY TAKEAWAYS

Moody’s Investors Service on Friday downgraded the outlook for Team Health from stable to negative.

UnitedHealth has also significantly reduced its payments to Team Health for out-of-network services.

Team Health has accused UnitedHealth of ‘aggressive and inappropriate behavior.’

Team Health Holdings Inc.’s ongoing contract fight with UnitedHealth Group Inc. is hurting the bond status on the Knoxville-based hospital staffing and management company.

Moody’s Investors Service on Friday downgraded the outlook for Team Health from stable to negative, after affirming the company’s B3 Corporate Family Rating and B3-PD Probability of Default Rating.

“The change of outlook reflects rising uncertainty around Team Health’s ability to reduce leverage given its recently disclosed dispute with UnitedHealth Group Inc., one of its largest commercial payors,” Moody’s said.

Moody’s also affirmed the B2 rating on Team Health’s senior secured credit facilities and Caa2 rating on its unsecured notes.

UnitedHealth told Team Health last month that it will cancel two-thirds of its in-network contracts with Team Health between October 2019 until July 2020.

UnitedHealth has also significantly reduced its payments to Team Health for out-of-network services, Moody’s noted.

Team Health provided a statement to HealthLeaders suggesting that it is lawyering up in preparation for more litigation with UnitedHealth.

“As Team Health continues to see more aggressive and inappropriate behavior by payors to either reduce, delay, or deny payments, we have increased our investment in legal resources to address specific situations where we believe payor behavior is inappropriate or unlawful,” the company said.

“To date, Team Health has been successful in getting reasonable reimbursements as a result of that litigation effort. Immediately following their most recent termination, United reached out to Team Health and we have begun negotiations,” Team Health said.

The hospital company said that, so far in 2019, it has successfully resolved eight lawsuits and has filed another 13 lawsuits.

“As United continues to arbitrarily terminate contracts, we expect to file more lawsuits for unfair payment practices and unjust enrichment – and despite United’s urgings we will not surprise bill patients to make up the difference,” Team Health said.

While Moody’s said it believes that Team Health and United will eventually reconcile, “modified contracts are likely to come with lower reimbursement rates for Team Health, which will reduce profitability.”

“Further, a drawn-out negotiation process may lead to disruption to hospital customers and contract losses,” Moody’s said.

“While there is a range of potential outcomes for Team Health, the company’s very high leverage raises the risk that even a modest reduction in profitability will significantly raise debt/EBITDA,” Moody’s said.

TeamHealth’s pro forma debt to EBITDA was estimated by Moody’s at approximately 8.2 times on June 30.

Moody’s noted that the B3 rating is supported by Team Health’s ability to generate positive cash flow of more than $100 million a year, and that the company’s liquidity remains solid.

“The company has a sizable cash balance ($299.4 million as of 6/30/2019), near full availability of its $400 million revolver and no near-term debt maturities,” Moody’s said.

“The company has also shown early signs of progress in executing its business turnaround. This affords the company some flexibility to absorb a modest negative development with respect to contract negotiations with UnitedHealth,” Moody’s said.

Even with that, Moody’s said, the reduced payments from UnitedHealth and potentially other insurers will create a “meaningful decline in free cash flow (that) will likely lead to a rating downgrade.”

“Reduced free cash flow would not only limit the company’s ability to repay debt, but also its ability to execute its tuck-in acquisition strategy,” Moody’s said.

“As United continues to arbitrarily terminate contracts, we expect to file more lawsuits for unfair payment practices and unjust enrichment – and despite United’s urgings we will not surprise bill patients to make up the difference.”

 

 

 

Trump admin opens door to fundamental changes in healthcare benefits

Posted on by • Posted in 2020 Election Issues, Defined Benefit Contribution Option, Employee Benefits, Health Reimbursement Accounts (HRA), Limited Delivery Networks, Out-of-Network • Leave a comment

https://www.healthcaredive.com/news/trump-admin-opens-door-to-fundamental-changes-in-healthcare-benefits/556927/

The Trump administration has opened the door to altering how healthcare benefits are provided to millions of American employees. A new rule, set to go into effect next year, will allow employers to provide workers with funds to shop for coverage on their own, an option that could dramatically upend employer-sponsored coverage.

Instead of working with an insurer and allowing employees to pick from a few insurance options, employers will be able to funnel money into a standalone tax-exempt HRA (health reimbursement account) and employees could use those funds to shop for coverage on their own, either on the Affordable Care Act marketplaces or off.

“Long term, this added flexibility may reshape a significant number of employer coverage offerings and result in sizable shifts from employer to individual coverage,” Chad Brooker, an associate principal at Avalere who consults on healthcare reform and the impacts on business strategy, said in a statement.

White House officials said the change provides more flexibility to employers and gives workers greater choice when choosing coverage. The White House expects 800,000 employers to choose this defined benefit contribution option, which is expected to affect 11 million employees and their families.

The American Benefits Council cheered the move.

“We commend the Administration for taking what we believe is an important step toward greater flexibility in health care coverage,” the employer group’s president, James Klein, said in a statement.

But others voiced their concerns about potential costs and access issues.

Paul Fronstin of the Washington, D.C.-based Employee Benefit Research Institute said it may be overwhelming for some employees used to relying on their employers to do the bulk of the shopping for them or going to bat for them when an issue with the insurance carrier arises.

“Some people are going to like that and some people are going to hate it,” Fronstin told Healthcare Dive.

Positives of the idea are that it could lessen job lock, when an employee is somewhat stuck in a job because they don’t want to, or can’t afford to lose benefits, including health insurance.

With the unemployment rate near a historic low, Fronstin doesn’t expect large employers to switch immediately. However, when the next recession hits, “I think the future of health benefits gets put to the test,” he said.

But others say the idea that it solves job lock is overplayed.

The options on the ACA exchange, particularly in St. Louis, may come as a shock to employees who are used to robust networks, Kevin Guss, vice president of private client benefit services for St. Louis-based benefits consulting firm J.W. Terrill, told Healthcare Dive.

There are few providers selling individuals plans, out-of-pocket maximums are far higher and many have very limited networks with little out-of-network availability, he said.

“You can save money if you pursue this path, but buyer beware,” Guss said.