Do Medicare Advantage Networks Vary by Plan within Contract?

Medicare Advantage (MA) is the private insurance alternative to traditional Medicare. MA organizations contract with Centers for Medicare and Medicaid Services (CMS) to offer eligible beneficiaries residing in a defined geographic service area (a collection of counties) a selection of private plans. Insurers may offer multiple plans across different plan types under one contract. The service area is defined at the contract-level, and for most MA plans, service areas can include a single county or a collection of multiple counties. (There are other types of plans for which there are constraints on the boundaries of the service area, but these don’t account for very much of MA enrollment.)

As MA-offering insurers contract with CMS, they establish networks that govern patient liability for seeing in- and out-of-network providers. Consequently, plans will vary in their cost-sharing structures and benefit designs as they assume different levels of liability for the cost of out-of-network providers. Overall, plans will cover the cost of care (less copays and deductibles) for patients seeing providers in-network, and certain plan types may require that patients pay more for out-of-network services or receive referrals/prior authorization from primary care providers (PCP) to see specialists.

The most common plan types offered by MA insurers include the following:

  • Preferred Provider Organizations (PPOs) are considered the most flexible type of plan in providing access to care and covering it out-of-network. PPO enrollees can use out-of-network providers for covered services without a referral from a PCP, albeit at greater cost to them than in-network providers.
  • Health Maintenance Organizations (HMOs), in comparison to PPOs, are more restrictive plans that provide less access to care and less coverage for out-of-network providers, with the exception of emergency, urgent, and dialysis care. HMO members are required to select a PCP and must get authorization for most specialty services. For any out-of-network services received, the patient bears the full cost, up to the traditional Medicare rate.
  • Health Maintenance Organization Point-of- Service (HMO-POS) are a hybrid plan between PPOs and HMOs. Like an HMO, members must select a PCP for care coordination, but they do not need a referral for specialty services. (However, some services may require prior authorization for coverage.) Like a PPO, this plan does provide some coverage for out-of-network providers.

The differences across plan types in access to and cost sharing for out-of-network providers leads to the important question, do MA networks vary by plan within contract? For example, in Figure 1 below, do the beneficiaries enrolled in Plan 1 or 2 under Contract A have the same set of in- and out-of-network providers (likewise for the beneficiaries in Plans 1-3 under contract B)? More specifically, what if Plan 1 is an HMO and Plan 2 is a HMO-POS plan, do they share the same network?

Figure 1: CMS Medicare Advantage and Part D Contract and Plan Enumeration (2010). Source: https://ncvhs.hhs.gov/wp-content/uploads/2014/05/100719p08.pdf

The simple answer seems to be: not necessarily, though more recent regulations attempt to push insurers toward having the same networks across plans within contracts.

For instance, prior to 2019, CMS only reviewed the adequacy of an MA organization’s contracted network under a “triggering event,” like if an organization were to operate a new plan, expand coverage to additional service areas, or in a response to inadequate network complaints. The scope of CMS’ review varied depending on the triggering event that occurred. In some cases, CMS could only conduct partial reviews of a contract’s network, looking at a select set of specialties or counties. A study by the US Government Accountability Office found that between 2013 and 2015, CMS had reviewed less than 1% of all networks. Without regular scrutiny by regulators, it seems likely that networks varied across plans within contracts.

Under the current MA Network Adequacy Criteria Guidance, CMS assesses network adequacy requirements both under triggering events (as explained above) and, separate from that, on a triennial-basis at the contract-level. CMS has previously commented in the 2021 Final Rule that this approach allows them to assess the adequacy of organizations’ networks across all of their plan types (HMOs, PPOs, SNPs) and consider the broadest availability of providers and facilities for an organization. Again, this suggests that insurers may vary networks across plans within contracts.

There are at least two scenarios for which we know certain plans can and likely do have different networks compared with other plans in the contract.

  • Special Needs Plans (SNPs) are plans designed for individuals with specific diseases or characteristics, such as those who are dual-eligible, have institutional care needs, or have a chronic condition. SNPs can be allowed by regulators to augment the contract’s network to integrate care management teams and specialty providers to accommodate beneficiaries’ complex care needs under the plan’s Model of Care. While SNPs may be granted additional flexibility to alter the contract-level networks established, CMS does not allow SNPs to narrow or shrink that network. They can only expand it.
  • Provider Specific Plan (PSPs) are plans often found under large, integrated medical groups or provider groups that are the primary bearers of risk. PSP enrollees have access to a smaller subset of in-network providers. Since this plan type has a network of fewer providers than the overall contracted network, organizations must request to offer a PSP from CMS and attest that these plans are in compliance with network adequacy requirements.

Future work with Vericred provider-network data could be one approach to exploring variations in networks among plans under the same contract and service area, beyond the cases listed above. If networks are varying across HMO, PPO, and HMO-POS plans within contracts, it would be interesting to explore just how different they are from one another. Moreover, as CMS reviews continues to review network adequacy requirements at the contract-level (and if networks do differ by plan), one should consider the breadth of the network that organizations are submitting for evaluation. To what extent all plans in a contract are in compliance with network adequacy rules warrants future investigation.

Out-of-pocket limits aren’t silver bullets

Part of the reason why medical debt is so high is because many Americans don’t have enough savings to pay their deductibles and other out-of-pocket costs, according to a second KFF analysis.

Driving the news: Health insurance plans’ out-of-pocket limits prevent enrollees from paying limitless sums of money for medical care. But that doesn’t mean they protect people from having to pay several thousands of dollars — which not everyone has lying around.

  • Deductibles alone, which people must pay before coverage for most services kicks in, are frequently thousands of dollars and can exceed the amount of liquid assets a household has.

By the numbers: Over 40% of multi-person households can’t cover a mid-range employer family plan deductible of $4,000, and 61% don’t have enough to cover a high-range deductible.

  • The ability to pay out-of-pocket costs varies significantly by income.

America’s giant medical debt

Americans owe at least $195 billion of medical debt, despite 90% of the population having some kind of health coverage, according to new research from the Peterson Center on Healthcare and the Kaiser Family Foundation.

Why it matters: People are spending down their savings and skimping on food, clothing and household items to pay their medical bills, Adriel writes.

About 16 million people, or 6% of U.S. adults, owe more than $1,000 in medical bills, and 3 million people owe more than $10,000.

  • The financial burden falls disproportionately on people with disabilities, those in generally poor health, Black Americans and people living in the South or in non-Medicaid expansion states, per the research.

Go deeper: 16% of privately-insured adults say they would need to take on credit card debt to meet an unexpected $400 medical expense, while 7% would borrow money from friends or family, per the research, which focused on adults who reported having more than $250 in unpaid bills as of December 2019. 

It’s not yet clear how much the pandemic and the recession factor into the picture, in part because many people delayed or went without care. There also was a small shift from employer-based coverage to Medicaid, which has little or no cost-sharing.

  • While the new federal ban on surprise billing limits exposure to some unexpected expenses, it only covers a fraction of the large medical bills many Americans face, the researchers say.

No Surprises Act implementation includes telehealth

https://www.healthcarefinancenews.com/news/no-surprises-act-implementation-includes-telehealth

Independent physician groups, which include telehealth docs, must now accept a rate that someone else has negotiated, expert says. 

The No Surprises Act has providers scrambling to understand the implications of a law that went into effect earlier this month.

Under the law, patients treated by an out-of-network physician can only be billed at the in-network rate. It protects patients from receiving surprise medical bills from the ER or air ambulance providers or for non-emergency services from out-of-network physicians at in-network facilities.

Patients can no longer receive balance bills – the difference between what the provider charges and what the insurer pays – or be charged a larger cost-sharing amount.

The congressional intent was to save patients sometimes thousands of dollars in unexpected, or surprise, medical bills. But applying the No Surprises Act to clinical care is being left to providers to sort out. 

A big question is the definition of an emergency and the benchmark used to determine when it ends, according to Kyle Faget, a partner at Foley who is co-chair of the firm’s Health Care and Life Sciences Practice Groups. She asked: Does the emergency end when the patient is stabilized, or should another standard apply? This includes emergency services for mental health and substance-use disorders.

Another question is around pre-planned services. Patients have to be notified who is providing the care and whether the physician is in-network. If the physician is out-of-network, patients must provide consent. But that can be tricky, for instance, if a patient scheduled for a planned C-section gets an out-of-network doctor who was not scheduled at the time the appointment was made.

At some hospitals, a new layer of administration is needed to comply with the law, Faget said.

Another area not well understood is how the law affects telehealth consults in the ER.

TELEHEALTH AND THE NO SURPRISES ACT

The law states that if treated by a telehealth clinician, the patient can only be billed the in-network rate, said Faget, who specializes in telehealth law.

Telehealth is often used in the ER, according to Faget. Most ER visits require a physician consultation, with hands-on medical care provided by a clinician other than the physician.

Pre-COVID-19, providers were in the embryonic stage of providing virtual emergency care, she said. The pandemic, and a shortage of physicians, spurred virtual care in the ER. 

These telehealth providers often work on a contracted basis. They are likely credentialed at the hospital but are not hospital employees, Faget said.

This means they are not credentialed with the insurer. Under the No Surprises Act, they are now subject to the in-network rates negotiated by the hospital. 

Telehealth ER physicians could negotiate their own contracts with insurers, but as a small group, they are not likely to get the higher rates they had prior to the implementation of the No Surprises Act.

“It’s an arduous contracting process, and small-group bargaining power is low,” Faget said. “The big hospital system has bargaining power. Those groups providing telehealth services won’t necessarily have agreements in place and, by definition, are out-of-network.”

Independent physician groups, which include telehealth docs, must now accept a rate that someone else has negotiated, Faget said. This fact can be more of an issue than the lower rate they’re now being paid, she said.

“I think telehealth will adapt,” Faget said. “I think it will become the way of doing business.”

WHY THIS MATTERS

The bottom line is that the No Surprises Act is doing what it promised to do – saving patients from getting a large bill not covered by insurance.

Surprise bills are a moral and ethical issue, Faget said. Patients, at their most vulnerable in the ER, are sent home only to get a $5,000 bill they never saw coming.

“It’s like kicking a person when they’re down,” Faget said.

However, in the larger healthcare ecosystem, ending surprise medical bills will ultimately result in cost-shifting, she said. 

“Think about the system globally: somebody is paying for something somewhere,” Faget said. “At the end of the day, somebody’s going to have to pay.”

THE LARGER TREND

Providers have told her that the No Surprises Act incentivizes insurance companies to lower their payments, Faget said.

The American Society of Anesthesiologists has accused BlueCross BlueShield of North Carolina of doing this. A letter sent by BCBS of North Carolina to anesthesiology and other physician practices this past November threatens to terminate physicians’ in-network status unless they agree to payment reductions ranging from 10% to over 30%, according to ASA. 

The ASA saw this as proof of its prognostication to Congress upon passage of the No Surprises Act: that insurers would use loopholes in the law to leverage their market power.

The AHA and AMA have sued the Department of Health and Human Services  over implementation of a dispute-resolution process in the law they say favors the insurer. The arbitrator must select the offer closest to the qualifying payment amount. Under the rule, this amount is set by the insurer, giving the payer an unfair advantage, according to the lawsuit. 

Out-of-network costs spin out of control

https://www.axios.com/billed-and-confused-cindy-beckwith-out-of-network-care-578a22be-b6b4-4959-8333-9e2e970b19d5.html

Out of Network costs vary greatly among California PPO health plans -

People who have health insurance but get sick with rare diseases that require out-of-network care continue to face potentially unlimited costs.

The big picture: Federal regulations cap how much people pay out of pocket for in-network care, but no such limit exists for out-of-network care.

Zoom in: Cindy Beckwith, 57, of Bolton, Connecticut, was diagnosed with pulmonary artery sarcoma, a rare tumor on a main artery. She also has fibromuscular dysplasia, a rare blood vessel condition.

  • She has ConnectiCare health insurance, which she gets through her husband’s employer.
  • Her local doctors suggested she see specialists at the University of Pennsylvania Health System because her conditions were so uncommon, but the system was out-of-network.
  • “I had to go out of my network,” Beckwith said. “I didn’t have a choice.”

The bill: $20,138.40 from Penn Medicine, the parent of UPHS, a profitable system with $8.7 billion of revenue last year.

  • Over a few years, Beckwith received a lot of care from the hospital, including two open-heart surgeries and inpatient chemotherapy.
  • This bill showed charges of $270,000, just for services received in 2019. Beckwith and the hospital settled on $20,138.40. Penn Medicine “insisted” she pay a minimum of $441 per month until 2023, she said.
  • Beckwith and her husband have already paid more than $11,000, and even though she says they are doing OK with her various medical bills, “there’s not a lot of extra money left over.”

Between the lines: The new surprise billing regulation only protects patients if they get non-emergency care from out-of-network doctors at in-network facilities.

  • That means people with employer coverage that doesn’t have an out-of-pocket maximum for out-of-network care could experience large bills based on hospitals’ inflated charges, and have to negotiate payment on their own.
  • “Out-of-network charges kind of seem like a little bit of funny money to consumers,” said Katherine Hempstead, a health insurance expert at the Robert Wood Johnson Foundation. “These are the things that make people feel kind of defeated.”
  • “We didn’t expect this to happen,” said Beckwith, who has worked in medical coding for 30 years, said of her condition. “When it does, it can wipe you out.”

The other side: Beckwith’s hospital and insurance providers did not make anyone available for interviews.

  • A ConnectiCare spokesperson said the insurer does “not speak about our members’ private health information.”
  • A Penn Medicine spokesperson said in a statement the system “has a longstanding commitment to work with patients to help them understand the costs associated with their care, including out-of-pocket costs.”

The resolution: After Axios submitted a HIPAA authorization waiver, signed by Beckwith, to Penn Medicine to discuss Beckwith’s case, Beckwith received a call from Penn Medicine, whom she hadn’t heard from in months.

  • The hospital knocked $4,000 off her remaining balance, telling her they reprocessed some old claims. She still owes almost $4,800.

Air Ambulance Costs Are Soaring

Air ambulance transport costs have skyrocketed in recent years, according to a new report from FAIR Health.

Notably, the average estimated in-network allowed amount for air ambulance transport increased 76.4%, from $8,855 in 2017 to $15,624 in 2020.

The jump was part of a general rise in costs for both airplane and helicopter air ambulance transport during this time period, FAIR Health said, which included increases in charge amounts (the amount charged to a patient who is uninsured or obtaining an out-of-network service), estimated in-network allowed amounts for privately insured patients (the total fee negotiated between an insurance plan and a provider for an in-network service), and Medicare reimbursement amounts.

The average charges associated with a fixed-wing air ambulance rose 27.6%, from $19,210 in 2017 to $24,507 in 2020, according to the report, and the average Medicare reimbursement amount increased by 4.7%, from $3,071 to $3,216.

For helicopter transport, the average charges associated with a rotary-wing air ambulance rose 22.2%, from $24,924 in 2017 to $30,446 in 2020. The average estimated in-network allowed amount increased 60.8%, from $11,608 to $18,668, and the average Medicare reimbursement amount again rose 4.7%, from $3,570 to $3,739.

Air ambulance services have been the subject of substantial policy focus,” said Robin Gelburd, president of FAIR Health, in a statement. “We hope that this study of air ambulance transport proves productive to policy makers, researchers, payors, providers, and consumers seeking to better understand this corner of the healthcare system.”

FAIR Health’s report also found that air ambulance claims increased 30% from 2016 to 2020 (0.7% to 0.9%) as a percentage of all ambulance (ground and air) claims.

In 2020, the most common diagnoses associated with fixed-wing air ambulance transport were chronic respiratory diseases, including chronic obstructive pulmonary disease and chronic respiratory failure, and the second most common was COVID-19, which accounted for 7% of fixed-wing air ambulance claims.

Because air ambulance transport is often used for patients in life-threatening situations, they generally have no control over type of transport or provider used, FAIR Health said. As a result, surprise bills occur frequently.

A number of states have made efforts to regulate air ambulance charges, but these attempts have been overturned by court rulings that state that such efforts are preempted by the Airline Deregulation Act of 1978, the report noted.

However, the federal No Surprises Act, signed into law in December 2020, contained provisions to protect consumers from surprise bills, including those from out-of-network air ambulance service providers.

On September 30, HHS held a press call on one of its surprise billing rules, which would require companies to give patients “good faith estimates” of charges upfront and to submit a dispute resolution for out-of-network surprise bills.

Asked by MedPage Today whether air ambulances would be included, a senior administration official responded, “Yes, air ambulances are covered by this rule. They will go through a very, very similar independent dispute resolution process [as other providers]. I think the only thing different about the air ambulance process is the list of allowable information that the parties can bring to be considered in addition to the qualifying amount.”

AMA report: U.S. has “highly concentrated” payer markets that stifle competition  

https://medcitynews.com/2021/10/ama-report-u-s-has-highly-concentrated-payer-markets-that-stifle-competition/?utm_campaign=MCN%20Daily%20Top%20Stories&utm_medium=email&hsmi=166812730&_hsenc=p2ANqtz–Z_7y9-ZOPkhC7HI4RXSwuM5xDzd2B0uZi9sApeW1J89hQBktG-rqujxpBFiXmxEEnaK77vlq-7vHhr-qK8mxRgBmwA&utm_content=166812730&utm_source=hs_email

About 73% of health insurance markets are highly concentrated, and in 46% of markets, one insurer had a share of 50% or more, a new report from the American Medical Association shows. The report comes a few months after President Joe Biden directed federal agencies to ramp up oversight of healthcare consolidation.

The majority of health insurance markets in the U.S. are highly concentrated, curbing competition, according to a report released by the American Medical Association.

For the report, researchers reviewed market share and market concentration data for the 50 states and District of Columbia, and each of the 384 metropolitan statistical areas in the country.

They found that 73% of the metropolitan statistical area-level payer markets were highly concentrated in 2020. In 91% of markets, at least one insurer had a market share of 30%, and in 46% of markets, one insurer had a share of 50% or more.

Further, the share of markets that are highly concentrated rose from 71% in 2014 to 73% last year. Of those markets that were not highly concentrated in 2014, 26% experienced an increase large enough to enter the category by 2020.

In terms of national-level market shares of the 10 largest U.S. health insurers, UnitedHealth Group comes out on top with the largest market share in both 2014 and 2020, reporting 16% and 15% market share, respectively. Anthem comes in second with shares of 13% in 2014 and 12% in 2020.

But the picture looks different when it comes to the market share of health insurers participating in the Affordable Care Act individual exchanges. In 2014, Anthem held the largest market share among the top 10 insurers on the exchanges, with a share of 14%. By 2020, Centene had taken the top spot, with a share of 18%, while Anthem had slipped to fifth place, with a share of just 4%.

Another key entrant into the top 10 list in 2020 was insurance technology company Oscar Health, with 3% of the market share in the exchanges at the national level.

“These [concentrated] markets are ripe for the exercise of health insurer market power, which harms consumers and providers of care,” the report authors wrote. “Our findings should prompt federal and state antitrust authorities to vigorously examine the competitive effects of proposed mergers involving health insurers.”

The payer industry hit back. In a statement provided to MedCity News, America’s Health Insurance Plans, a national payer association, said that Americans have many affordable choices for their coverage, pointing to the fact that CMS announced average premiums for Medicare Advantage plans will drop to $19 per month in 2022 from $21.22 this year.

“Health insurance providers are an advocate for Americans, fighting for lower prices and more choices for them,” said Kristine Grow, senior vice president of communications at America’s Health Insurance Plans, in an email. “We negotiate lower prices with doctors, hospitals and drug companies, and consumers benefit from lower premiums as a result.”

Further, the report does not mention the provider consolidation that also contributes to higher healthcare prices. Mergers and acquisitions among hospitals and health systems have continued steadily over the past decade, remaining relatively impervious to even the Covid-19 pandemic.

Scrutiny around consolidation in the healthcare industry may grow. In July, President Joe Biden issued an executive order urging federal agencies to review and revise their merger guidelines through the lens of preventing patient harm.

The Federal Trade Commission has already said that healthcare businesses will be one of its priority targets for antitrust enforcement actions.