Tag Archives: Medicare Advantage

Alphabet’s $375 million investment in Oscar Health will expand insurer into Medicare Advantage

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https://www.healthcarefinancenews.com/news/alphabets-375-million-oscar-health-will-expand-insurer-medicare-advantage-business?mkt_tok=eyJpIjoiWTJNeE5UZzRNalU1WWprMSIsInQiOiJRNjRWYXFQcSt3aHpGMlB4RVwvbXA3ckt4MVlxZ04zeHl5VWtKMzB4V2dpa21LTTY3U2pMdWlnSHh3MXRMWlwvWkdQNEdldGVjRWpWUG5Md0xmbTlQVE0zVTdFUStxY0lQcmNpUkRRRHpPelZSOUNBTW90WDNNbGd1ekZsZGZHVU04In0%3D

Oscar says it uses technology to lower cost: More than 60 percent of member interactions with health systems are virtual.

Alphabet, the parent company of Google, is investing $375 million in Oscar Health, the technology-driven health insurer cofounded by Mario Schlosser and Joshua Kushner, brother of White House advisor Jared Kushner.

The funds will help move the New York City-based insurer into its next phase of expansion, entering the Medicare Advantage market.

“Today, we are announcing Alphabet’s plans to invest $375 million into Oscar Health,” said Mario Schlosser, co-founder and CEO of Oscar Health. “Oscar will accelerate the pursuit of its mission: to make our healthcare system work for consumers. We will continue to build a member experience that lowers costs and improves care, and to bring Oscar to more people — deepening our expansion into the individual and small business markets while entering a new business segment, Medicare Advantage, in 2020.”

Schlosser also announced the addition of Salar Kamangar to Oscar’s board. Kamangar is a senior executive at Google and former CEO of YouTube.

This is the second big investment for Oscar Health in less than a year. In March, Oscar raised $165 million from Alphabet, Founders Fund and other sources.

Numerous insurers have jumped into the MA market, finding there a growing population of aging baby boomers who are attracted to the plan’s additional benefits, such as dental and vision. About a third of Medicare beneficiaries have Medicare Advantage as their plan.

MA has seen strong earnings for insurers. UnitedHealth Group, Humana, Aetna, Cigna, Anthem, Centene and numerous Blue Cross Blue Shield plans are in the MA market, contracting with the federal government to offer the private plans.

Oscar is also in the Affordable Care Act market.

However, the insurer has struggled to turn a profit, according to Politico.

Schlosser and Kushner founded the company in 2012, saying the only way to fix the broken healthcare system is to empower the consumer.

Oscar uses data science and technology to do lower costs. 

Sixty-three percent of member interactions with the healthcare system are virtual, the company said. More than 40 percent manage their health through the Oscar website and mobile apps. Forty-three percent of members’ first visits to the doctor are routed through Oscar.

In June, Oscar announced it had added three states, Florida, Arizona and Michigan, to the existing six where it has a footprint: California, Ohio, New York, New Jersey, Texas and Tennessee.

It added three additional large metro areas in Ohio, Tennessee and Texas for a total of 14 markets, 260,000 members and $1 billion in premiums.

 

 

Walmart drug program cheaper for many Medicare patients

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https://www.nbcnews.com/health/health-news/walmart-drug-program-cheaper-many-medicare-patients-n893811

Grand Opening At A New Wal-Mart Store

Walmart’s $4 generic prescription drug program ends up being cheaper for some Medicare patients than their own health insurance, according to a new study released Monday.

It’s more evidence that patients cannot always rely on their health insurance to get them the lowest prices for their prescription drugs, said Dr. Joseph Ross of the Yale School of Medicine, who led the study.

“Patients were paying more out of pocket when they were using their insurance than when they went to Walmart,” Ross told NBC News.

The study, published in the Annals of Internal Medicine, documents that Walmart provides a better deal than the government’s health insurance plan for people over 65. And that is bad news for Medicare, because if people don’t take their drugs, whether for cost or for other reasons, they tend to get sicker and then end up costing even more to treat.

“Everyone’s talking about pharmacy costs these days,” Ross said. “We did this study in part because of all the discussion about pharmacy gag rules.”

Pharmacy gag rules prevent pharmacists from telling patients that they could save money on drugs, for instance by not using their health insurance.

Pharmacy benefit managers are the middlemen between drug companies and pharmacies, and some of those companies have agreements forbidding talk of discounts. But some states have also banned pharmacists from giving this information to customers.

According to the National Conference of State Legislatures, at least 22 states have some kind of gag rule legislation.

One way patients can get around this is to ask, but few people think to do so.

Ross and colleagues decided to see what would happen if Medicare patients just took advantage of Walmart’s program offering $4 generic prescription drugs.

They looked at Walmart’s generic list for drugs commonly used to treat heart conditions, including high blood pressure and high cholesterol.

“Next, we used Medicare prescription drug plan data from June 2017 to determine beneficiary out-of-pocket costs for the lowest-priced dose of each drug in each plan,” they wrote. They got data on more than 2,000 Medicare prescription drug plans, including Medicare Advantage plans.

Overall, 21 percent of the plans asked patients to pay more out of pocket for the drugs than they would pay if they just got them for $4 at Walmart, the team reported.

Medicare Advantage plans were the most expensive for patients, Ross said. And the higher-tier programs were the worst, he found.

“Twenty percent of the time, at least, we should go to Walmart,” Ross said.

It doesn’t help that Medicare is very complicated. Patients can choose from dozens of different plans, depending on where they live, and it can take a great deal of research to find out which plan is most likely to cover a particular person’s health conditions for the least amount of money.

“Each Medicare drug plan has its own list of covered drugs (called a formulary),” the Center for Medicare and Medicaid Services says on its website.

“Many Medicare drug plans place drugs into different ‘tiers’ on their formularies. Drugs in each tier have a different cost. A drug in a lower tier will generally cost you less than a drug in a higher tier.”

Ross said it is time-consuming to compare one Medicare plan to another. But understanding one of the many plans tells people very little about what the others might offer.

“If you have read through the details and material for one plan, you have read through the details and materials for one plan. It’s very hard to compare,” he said.

In addition, any given plan may change the drugs that it covers and their prices throughout the year.

Ross said he studied Walmart because its $4 price for a 30-day supply of a generic drug seemed like the least expensive option, but other retailers also have inexpensive drug plans. Some grocery-based pharmacies even offer free drugs, such as antibiotics.

These offers get customers into the store, and the hope is that they’ll buy something else while they are there.

Ross said no patient should decide on a Medicare plan based solely on whether Walmart offers a better deal on prescriptions.

Switching plans might not be the best idea, because different plans provide different levels of coverage for doctor visits, medical procedures and other health needs.

“What we are showing is there may be some ways to save some money on some drugs by going to Walmart,” Ross said.

According to the Kaiser Family Foundation, about 90 percent of prescriptions filled in the U.S. are for generic drugs. Most people get health insurance through an employer, and the typical co-pay for a generic drug for a patient covered by employer-provided health insurance is $11, Kaiser found. For a brand-name drug, the average co-pay is $33.

Walmart is moving aggressively to get a big share of the U.S. health care market. Besides having large pharmacies, stores offer free health screenings and the company has said it intends to expand its locations of retail walk-in health clinics.

Walmart is also negotiating a closer partnership with health insurer Humana, including the possibility of buying it outright, according to CNBC.

The discount retailer’s $4 generic prescriptions beat Medicare’s co-pays 21 percent of the time, a study found.

 

 

 

Medigap Enrollment and Consumer Protections Vary Across States

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Medigap Enrollment and Consumer Protections Vary Across States

One in four people in traditional Medicare (25 percent) had private, supplemental health insurance in 2015—also known as Medigap—to help cover their Medicare deductibles and cost-sharing requirements, as well as protect themselves against catastrophic expenses for Medicare-covered services. This issue brief provides an overview of Medigap enrollment and analyzes consumer protections under federal law and state regulations that can affect beneficiaries’ access to Medigap. In particular, this brief examines implications for older adults with pre-existing medical conditions who may be unable to purchase a Medigap policy or change their supplemental coverage after their initial open enrollment period.

Key Findings

  • The share of beneficiaries with Medigap varies widely by state—from 3 percent in Hawaii to 51 percent in Kansas.
  • Federal law provides limited consumer protections for adults ages 65 and older who want to purchase a supplemental Medigap policy—including, a one-time, 6-month open enrollment period that begins when they first enroll in Medicare Part B.
  • States have the flexibility to institute consumer protections for Medigap that go beyond the minimum federal standards. For example, 28 states require Medigap insurers to issue policies to eligible Medicare beneficiaries whose employer has changed their retiree health coverage benefits.
  • Only four states (CT, MA, ME, NY) require either continuous or annual guaranteed issue protections for Medigap for all beneficiaries in traditional Medicare ages 65 and older, regardless of medical history (Figure 1). Guaranteed issue protections prohibit insurers from denying a Medigap policy to eligible applicants, including people with pre-existing conditions, such as diabetes and heart disease.
  • In all other states and D.C., people who switch from a Medicare Advantage plan to traditional Medicare may be denied a Medigap policy due to a pre-existing condition, with few exceptions, such as if they move to a new area or are in a Medicare Advantage trial period.

Medigap is a key source of supplemental coverage for people in traditional Medicare

Medicare beneficiaries can choose to get their Medicare benefits (Parts A and B) through the traditional Medicare program or a Medicare Advantage plan, such as a Medicare HMO or PPO. Roughly two-thirds of Medicare beneficiaries are in traditional Medicare, and most have some form of supplemental health insurance coverage because Medicare’s benefit design includes substantial cost-sharing requirements, with no limit on out-of-pocket spending. Medicare requires a Part A deductible for hospitalizations ($1,340 in 2018), a separate deductible for most Part B services ($183), 20 percent coinsurance for many Part B (physician and outpatient) services, daily copayments for hospital stays that are longer than 60 days, and daily copays for extended stays in skilled nursing facilities.

To help with these expenses and limit their exposure to catastrophic out-of-pocket costs for Medicare-covered services, a quarter of beneficiaries in traditional Medicare (25 percent) had a private, supplemental insurance policy, known as Medigap in 2015 (Figure 2). Medigap serves as a key source of supplemental coverage for people in traditional Medicare who do not have supplemental employer- or union-sponsored retiree coverage or Medicaid, because their incomes and assets are too high to qualify. Medicare beneficiaries also purchase Medigap policies to make health care costs more predictable by spreading costs over the course of the year through monthly premium payments, and to reduce the paperwork burden associated with medical bills.1

Medigap policy benefits were standardized through the Omnibus Budget Reconciliation Act of 1990, which also included additional consumer protections discussed later in this issue brief.2 Of the 10 standard Medigap policies available to beneficiaries, Plan F is the most popular, accounting for over half of all policyholders in 2016, because it covers the Part A and B deductibles (as does Plan C), and all cost-sharing for Part A and B covered services.3

The share of all Medicare beneficiaries with Medigap coverage varies widely by state—from 3 percent in Hawaii to 51 percent in Kansas in 2016 (Figure 3, Appendix Table). In 20 states, at least one-quarter of all Medicare beneficiaries have a Medigap policy. States with higher Medigap enrollment tend to be in the Midwest and plains states, where relatively fewer beneficiaries are enrolled in Medicare Advantage plans.4

Medigap coverage is substantially more common for Medicare beneficiaries ages 65 and older than it is for younger Medicare beneficiaries, many of whom qualify for Medicare because of a long-term disability. Only 5 percent of traditional Medicare beneficiaries under age 65 had Medigap in 2015—considerably lower than the shares in older age brackets (Figure 4). The low enrollment in Medigap by beneficiaries under age 65 is likely due to the absence of federal guarantee issue requirements for younger Medicare beneficiaries with disabilities (discussed later in this brief) and higher rates of Medicaid coverage for people on Medicare with disabilities who tend to have relatively low incomes.

Federal law provides limited consumer protections for Medigap policies

In general, Medigap insurance is state regulated, but also subject to certain federal minimum requirements and consumer protections. For example, federal law requires Medigap plans to be standardized to make it easier for consumers to compare benefits and premiums across plans. Federal law also requires Medigap insurers to offer “guaranteed issue” policies to Medicare beneficiaries age 65 and older during the first six months of their enrollment in Medicare Part B and during other qualifying events (listed later in this brief). During these defined periods, Medigap insurers cannot deny a Medigap policy to any applicant based on factors such as age, gender, or health status. Further, during these periods, Medigap insurers cannot vary premiums based on an applicant’s pre-existing medical conditions (i.e., medical underwriting). However, under federal law, Medigap insurers may impose a waiting period of up to six months to cover services related to pre-existing conditions, only if the applicant did not have at least six months of prior continuous creditable coverage.5 As described later in this brief, states have the flexibility to institute Medigap consumer protections that go further than the minimum federal standards.

Federal law also imposes other consumer protections for Medigap policies. These include “guaranteed renewability” (with few exceptions), minimum medical loss ratios, limits on agent commissions to discourage “churning” of policies, and rules prohibiting Medigap policies to be sold to applicants with duplicate health coverage.6 (For further details on these requirements and a history of federal involvement in the Medigap market, see Medigap: Spotlight on Enrollment, Premiums, and Recent Trends, April 2013.)

When does federal law require guaranteed issue protections for Medigap?

Federal law provides guaranteed issue protections for Medigap policies during a one-time, six-month Medigap open enrollment period for beneficiaries ages 65 and older when enrolling in Medicare Part B, and for certain qualifying events. These limited circumstances include instances when Medicare beneficiaries involuntarily lose supplemental coverage, such as when their Medicare Advantage plan discontinues coverage in their area, or when their employers cancel their retiree coverage. Beneficiaries who are in a Medicare Advantage plan also have federal guaranteed issue rights when they move to a new area and can no longer access coverage from their Medicare Advantage plan. In these qualifying events, people ages 65 and older in Medicare generally have 63 days to apply for a supplemental Medigap policy under these federal guaranteed issue protections.

Federal law also requires that Medigap polices be sold with guaranteed issue rights during specified “trial” periods for Medicare Advantage plans. One of these trial periods is during the first year older adults enroll in Medicare. During that time, older adults can try a Medicare Advantage plan, but if they disenroll within the first year, they have guaranteed issue rights to purchase a Medigap policy under federal law. Another trial period applies to Medicare beneficiaries who cancel their Medigap policy to enroll in a Medicare Advantage plan. These beneficiaries have time-limited guaranteed issue rights to purchase their same Medigap policy if, within a year of signing up for a Medicare Advantage plan, they decide to disenroll to obtain coverage under traditional Medicare.

States have the flexibility to institute Medigap consumer protections that go further than the minimum federal standards, such as extending guaranteed issue requirements beyond the open enrollment period or adding other qualifying events that would require insurers to issue policies, as discussed later in this brief.

When does federal law not provide guaranteed issue protections for Medigap?

Broadly speaking, after 6 months of enrolling in Medicare Part B, older adults do not have federal guaranteed issue protections when applying for Medigap, except for specified qualifying events described earlier (Table 2). Therefore, older adults in traditional Medicare who miss the open enrollment period may, in most states, be subject to medical underwriting, and potentially denied a Medigap policy due to pre-existing conditions, or charged higher premiums due to their health status.

Medical Underwriting. Insurance companies that sell Medigap policies may refuse to sell a policy to an applicant with medical conditions, except under circumstances described above. The Text Box on this page provides examples of health conditions that may lead to the denial of Medigap policies, derived from underwriting manuals/guides from multiple insurance companies selling Medigap policies. Examples of conditions listed by insurers as reasons for policy denials include diabetes, heart disease, cancer, and being advised by a physician to have surgery, medical tests, treatments, or therapies.

Barriers for Beneficiaries Under Age 65 with Disabilities. Under federal law, Medigap insurers are not required to sell Medigap policies to the over 9 million Medicare beneficiaries who are under age of 65, many of whom qualify for Medicare based on a long-term disability. (However, when these beneficiaries turn age 65, federal law requires that they be eligible for the same six-month open enrollment period for Medigap that is available to new beneficiaries age 65 and older.)

Beneficiaries Choosing to Switch from Medicare Advantage to Traditional Medicare. There are no federal guarantee issue protections for individuals who choose to switch from a Medicare Advantage plan to traditional Medicare and apply for a Medigap policy, except under limited circumstances described in Table 2. In most states, therefore, beneficiaries who want to switch from their Medicare Advantage plan to traditional Medicare may be subject to medical underwriting and denied coverage when they apply for a Medigap policy because they do not have guaranteed issue rights, with some exceptions (e.g., if they have moved or if they are in a limited trial period). In states that allow medical underwriting for Medigap, Medicare Advantage enrollees with pre-existing conditions may find it too financially risky to switch to traditional Medicare if they are unable to purchase a Medigap policy. Without Medigap, they could be exposed to high cost-sharing requirements, mainly because traditional Medicare does not have a limit on out-of-pocket spending (in contrast to Medicare Advantage plans).7

Some states require guaranteed issue and other consumer protections for Medigap beyond the federal minimum requirements

States have the flexibility to institute Medigap consumer protections that go further than the minimum federal standards. While many states have used this flexibility to expand guarantee issue rights for Medigap under certain circumstances, 15 states and the District of Columbia have not, relying only the minimum guarantee issue requirements under federal law (Table 3).

Only four states require Medigap insurers to offer policies to Medicare beneficiaries age 65 and older (Figure 5). Three of these states (Connecticut, Massachusetts, and New York) have continuous open enrollment, with guaranteed issue rights throughout the year, and one state (Maine) requires insurers to issue Medigap Plan A (the least generous Medigap plan shown earlier in Table 1) during an annual one-month open enrollment period. Consistent with federal law, Medigap insurers in New York, Connecticut, and Maine may impose up to a six-month “waiting period” to cover services related to pre-existing conditions if the applicant did not have six months of continuous creditable coverage prior to purchasing a policy during the initial Medigap open enrollment period.8 Massachusetts prohibits pre-existing condition waiting periods for its Medicare supplement policies.

Many other states have expanded on the federal minimum standards in more narrow ways by requiring Medigap insurers to offer policies to eligible applicants during additional qualifying events (Table 3). For example, 28 states require Medigap insurers to issue policies when an applicant has an involuntary change in their employer (retiree) coverage. (This qualifying event is more expansive than federal law, which applies only when retiree coverage is completely eliminated.) Nine states provide guaranteed issue rights for applicants who lose their Medicaid eligibility.9

As noted above, federal law does not require Medigap insurers to issue policies to Medicare beneficiaries under the age of 65, most of whom qualify for Medicare because of a long-term disability. However, 31 states require insurers to provide at least one kind of Medigap policy to beneficiaries younger than age 65 (typically through an initial open enrollment period).10

Some states provide stronger consumer protections for Medigap premiums than others

States also have the flexibility to establish rules on whether or not Medigap premiums may be affected by factors such as a policyholder’s age, smoking status, gender, and residential area. Federal law allows states to alter premiums based on these factors, even during guaranteed issue open enrollment periods.

There are three different rating systems that can affect how Medigap insurers determine premiums: community rating, issue-age rating, or attained-age rating (defined in the Text box below). States can impose regulations on which of these rating systems are permitted or required for Medigap policies sold in their state. Of the three, community rating provides the strongest consumer protection for Medigap policies because it does not allow premiums to be based on the applicant or policyholder’s age or health status. However, insurers in states that require community rating may charge different premiums based on other factors, such as smoking status and residential area. In states that allow attained age rating, older applicants and policyholders have considerably less protection from higher premiums because premiums may increase at unpredictable rates as policyholders age.

Premium rating systems

Community rating: Insurers must charge all policyholders within a given plan type the same premium without regard to age (among people age 65 and older) or health status. Insurers can raise premiums only if they do so for all policyholders of the given plan type. Insurers may still adjust premiums based on other factors, including smoking status, gender, and residential area.

Issue-age rating: Insurers may vary premiums based on the age of the policyholder at the time of purchase, but cannot increase the policyholder’s premium automatically in later years based on his/her age. Additionally, insurers may charge different premiums based on other factors, including health status, smoking status, and residential area.

Attained-age rating: Insurers may vary premiums based on the age of the policyholder at the time of purchase and increase premiums for policyholders as they age. Additionally, insurers may charge different premiums based on other factors, including health status, smoking status, and residential area.

Currently, eight states (AR, CT, MA, ME, MN, NY, VT, and WA) require premiums to be community rated among policyholders ages 65 and older. This means that Medigap insurers cannot charge higher premiums to people because they are older or sicker, and therefore, must charge an 80-year old policyholder the same as a 70-year old policyholder regardless of health status (Table 4). Insurers may still adjust premiums based on other factors, including smoking status, gender, and residential area. A state’s community rating requirement does not, in itself, guarantee that applicants will be issued a policy in the state. However, as described earlier, four of the states that have community rating (CT, MA, ME, NY), have guarantee issue protections and require insurers to issue Medigap policies to eligible applicants either continuously during the year, or during an annual enrollment period.

The remaining 38 states and the District of Columbia do not require premiums to be community rated; therefore, Medigap premiums in these states may be subject to issue-age and attained-age rating systems, depending on state regulation. Medigap insurers are permitted to offer community rated policies in these states, but most do not.11 Additionally, Medigap insurers may increase premiums due to inflation, regardless of the premium rating system.12

Discussion

Medigap plays a major role in providing supplemental coverage for people in traditional Medicare, particularly among those who do not have an employer-sponsored retiree plan or do not qualify for cost-sharing assistance under Medicaid. Medigap helps beneficiaries budget for out-of-pocket expenses under traditional Medicare. Medigap also limits the financial exposure that beneficiaries would otherwise face due to the absence of an out-of-pocket limit under traditional Medicare.

Nonetheless, Medigap is not subject to the same federal guaranteed issue protections that apply to Medicare Advantage and Part D plans, with an annual open enrollment period. As a result, in most states, medical underwriting is permitted which means that beneficiaries with pre-existing conditions may be denied a Medigap policy due to their health status, except under limited circumstances.

Federal law requires Medigap guaranteed issue protections for people age 65 and older during the first six months of their Medicare Part B enrollment and during a “trial” Medicare Advantage enrollment period. Medicare beneficiaries who miss these windows of opportunity may unwittingly forgo the chance to purchase a Medigap policy later in life if their needs or priorities change.13 This constraint potentially affects the nearly 9 million beneficiaries in traditional Medicare with no supplemental coverage; it may also affect millions of Medicare Advantage plan enrollees who may incorrectly assume they will be able to purchase supplemental coverage if they choose to switch to traditional Medicare at some point during their many years on Medicare.

Only four states (CT, MA, NY, ME) require Medigap policies to be issued, either continuously or for one month per year for all Medicare beneficiaries age 65 and older. Policymakers could consider a number of other policy options to broaden access to Medigap. One approach could be to require annual Medigap open enrollment periods, as is the case with Medicare Advantage and Part D plans, making Medigap available to all applicants without regard to medical history during this period. Another option would be to make voluntary disenrollment from a Medicare Advantage plan a qualifying event with guaranteed issue rights for Medigap, recognizing the presence of beneficiaries’ previous “creditable” coverage. For Medicare beneficiaries younger than age 65, policymakers could consider adopting federal guaranteed issue protections, building on rules already established by the majority of states.

On the one hand, these expanded guaranteed issue protections would increase beneficiaries’ access to Medigap, especially for people with pre-existing medical conditions. They would also treat Medigap similarly to Medicare Advantage in this regard, and make it easier for older adults to switch between Medicare Advantage and traditional Medicare if their Medicare Advantage plan is not serving their needs in later life. On the other hand, broader guaranteed issue policies could result in some beneficiaries waiting until they have a serious health problem before purchasing Medigap coverage, which would likely increase premiums for all Medigap policyholders. A different approach altogether would be to minimize the need for supplemental coverage in Medicare by adding an out-of-pocket limit to traditional Medicare.14

Ongoing policy discussions affecting Medicare and its benefit design could provide an opportunity to consider various ways to enhance federal consumer protections for supplemental coverage or manage beneficiary exposure to high out-of-pocket costs. As older adults age on to Medicare, they would be well-advised to understand the Medigap rules where they live, and the trade-offs involved when making coverage decisions.

 

 

 

 

 

 

More Medicare patients dying at home, JAMA study finds

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https://www.healthcaredive.com/news/more-medicare-patients-dying-at-home-jama-study-finds/526477/

Dive Brief:

  • More Medicare fee-for-service and Medicare Advantage beneficiaries are dying at home or in community settings than in acute care hospitals, according to new findings published in JAMA.
  • The study showed proportions of fee-for-service beneficiary deaths occurring in an acute care hospital decreased from 32.6% in 2000 to 19.8% in 2015. Proportions of deaths occurring in the home or in a community setting (foster care home, assisted living facilities) increased from 30.7% to 40.1% in the same time span.
  • Medicare Advantage beneficiaries were less likely to be hospitalized overall than those in traditional fee-for-service plans and, in the last 30 days of life, the difference in the hospitalization rates was 9.3% — a difference study author Joan Teno called “huge.”

Dive Insight:

Although most Americans over 65 say that they’d prefer to die at home, in 2009 only 24% of them actually did. Yet, in recent years, more and more Americans are choosing to live out their last days in their home or community instead of being admitted to a hospital.

The JAMA study reveals a potential patient response to the current inadequacy of end-of-life care as, for some older Americans, ending up in a hospital can mean high-cost and aggressive treatment in their final days.

Such treatment does not always equal better care. When it comes to their elderly patients, incumbent healthcare systems increasingly specialize in expensive, often unnecessary services as opposed to a value-based approach.

The findings come on the tide of the so-called “silver tsunami” as the American population skews ever older. The number of Americans aged 65 or older is projected to more than double by 2060, when they will eventually account for 24% of the total population.

New startups have emerged looking to address the institutional inadequacy of end-of-life care, viewing the aging population as a business opportunity. The growing companies zero in on technology-driven solutions in home health, chronic illness and end-of-life care as they look to scale to combat industry issues.

Such startups are a potential wake-up call for traditional healthcare organizations.

“Innovation comes from the private sector,” Teno, a professor of medicine at the University of Washington, told Healthcare Dive.

“I think the implication of this is that hospitals are going to have to change how they’re practicing. They’re going to have to come into new population-based business models that don’t have their entire survival based on their number of admissions,” she said.

On the hospital side, Teno called for multifaceted interventions that address the issue of care overuse and fragmentation in hospitals, such as care bundling and coordination, surveys measuring patient satisfaction and public reporting of readmission rates.

Despite the challenges, Teno was optimistic about ​study’s implications.

“We’re on the right path,” she said. “We need to wean ourselves off of this fee-for-service world of paying for a procedure and paying for volume, to paying for value.”

“The fee-for-service world provides perverse incentives,” Teno stressed, also noting that it tends to lead to hospital disorganization and miscommunication. 

Teno cited the growth of Medicare Advantage as a program (it accounts for a third of Medicare enrollees and spending), and the 9.3% difference in hospitalization rates between MA and fee-for-service as a good sign for the future of healthcare.

 

More than a quarter of major health systems plan Medicare Advantage launch, though many lack confidence

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http://www.healthcarefinancenews.com/news/more-quarter-major-health-systems-plan-medicare-advantage-launch-though-many-lack-confidence?mkt_tok=eyJpIjoiWkdSaE9UZzRPV0poTW1FeCIsInQiOiJTK1lnZEdEakdOVlZNYWRBSzF5M3o1d3BRWmpQXC8ydVBYN2lFY01mUEQwbnhTVjBIU2NScmdIMWtXcjN3NGpXb1NoSG53clwvXC90TzJ1QWFPRWpoeGFtXC9jSHl4TFwvbDgwMEZYaU1kVmxRa1NCNHloRk9lK0VUZFBkVEVuV1hHTytIIn0%3D

 

Executives say the top reason for launching a Medicare Advantage plan is the opportunity to capture more value.

A new survey from Lumeris found that 27 percent of major U.S. health system executives intend to launch a Medicare Advantage plan in the next four years. Despite that, confidence among these same execs is lacking, with only 29 percent reporting they felt confident in their organization’s ability to make the launch successfully.

“These survey findings are consistent with our conversations with healthcare executives across the country who are feeling a sense of urgency around Medicare Advantage strategies, but also realize that this type of work is vastly different than traditional health system operations,” said Jeff Carroll, executive director of health plans at Lumeris, by statement.

In April, The Centers for Medicare and Medicaid Services announced it was releasing Medicare Advantage encounter data for the first time by request from the CMS Research Data Assistance Center. The MA encounter data, starting from 2015, provides detailed information about services to beneficiaries enrolled in a Medicare Advantage managed plan. It will give researchers insight into the care delivered under MA plans and will help them improve the Medicare program, CMS said. Annual updates are planned.

According to the 90 executives Lumeris surveyed from major health systems, the top reason for launching a Medicare Advantage plan is the opportunity to capture more value by controlling a greater portion of the premium dollar as compared to fee-for-service Medicare.

Other key drivers cited include market and regulatory trends supporting Medicare Advantage. In particular, shrinking Medicare margins could threaten the viability of hospitals and health systems as the senior population continues to grow and becomes a larger proportion of providers’ patient panels.

The respondents also recognized that launching a Medicare Advantage plan will be challenging due to the complexities of operating an insurance plan, which are far different than the capabilities required to successfully operate a health system.

They also shared concerns about the significant financial investment required and an overall lack of expertise in the health plan space. The majority of respondents, 59 percent, indicated they were likely to use outside resources to launch their plans — and that those resources are very likely to include a vendor partner that can mitigate operational risk.

“Launching and managing a Medicare Advantage plan requires skills beyond the core competencies of most health systems, which is one reason many provider-sponsored plans fail in the first few years,” Carroll said. “Through those failures, it has become clear that providers who select the right partners increase the likelihood for greater success in a shorter period of time.”

 

Anthem reports flat operating revenues due to exit from Affordable Care Act market

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Net income increased 30 percent driven by premium rate increases, the return of the health insurance tax and the acquisition of MA plans.

Anthem reported a 30 percent increase in net income for the first quarter compared to the same three months of 2017, but operating revenues remained relatively flat primarily due to the insurer’s planned exits from the Affordable Care Act marketplace.

On Wednesday, Anthem reported net income for the first quarter of $1.3 billion, versus 1 billion for the first three months in 2017.

First quarter operating revenues were relatively flat at $22.3 billion year-over-year due to a decrease in its individual market business.

In 2017, Anthem announced it would cut back its ACA footprint by about 70 percent.

Revenues were helped by premium rate increases to cover overall cost trends, the return of the health insurance tax and the acquisitions of HealthSun and America’s 1st Choice.

Anthem’s acquisition of HealthSun, completed at the end of 2017, added a Medicare Advantage health plan and delivery network in Florida.

The acquisition of America’s 1st Choice was finalized in February. The privately-held, for-profit Medicare Advantage organization  offers HMO products, including chronic special needs plans and dual-eligible special needs plans under its Freedom Health and Optimum brands in Florida. The deal added 135,000 Medicare Advantage members and included a 5 star plan.

Anthem’s medical enrollment totaled approximately 39.6 million members as of March 31, a decrease of 1 million or 2.5 percent percent, from 40.6 million at March 31, 2017.

The company said it now expects medical enrollment to be between 40.1 – 40.3 million for the full year 2018.

Counteracting the individual market decline, Anthem’s government business grew 10 percent year-over-year through a focus on serving the complex social and medical requirements of the dual special needs population.

Medical enrollment declined by 616,000 during the first quarter reflecting a decrease in the individual and local group fully-insured businesses. Medicare grew by 237,000 members and Medicaid enrollment declined by 120,000 individuals.

“We are pleased with our first quarter 2018 financial performance, which reflects our commitment to strong medical cost performance by effectively leveraging community based innovative and integrated clinical and value based care models across our markets,” said CEO and President Gail Boudreaux. “Throughout 2018, we are prioritizing investments to create a more flexible infrastructure that can quickly respond to the evolving needs of our customers and the changing healthcare environment.”

 

Medicare Advantage Plans Cleared To Go Beyond Medical Coverage — Even Groceries

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Medicare Advantage Plans Cleared To Go Beyond Medical Coverage — Even Groceries

Air conditioners for people with asthma, healthy groceries, rides to medical appointments and home-delivered meals may be among the new benefits offered to Medicare beneficiaries who choose private sector health plans, when new federal rules take effect next year.

On Monday, the Centers for Medicare & Medicaid Services (CMS) expanded how it defines the “primarily health-related” benefits that private insurers are allowed to include in their Medicare Advantage policies. And insurers would include these extras on top of providing the benefits traditional Medicare provides.

“Medicare Advantage beneficiaries will have more supplemental benefits, making it easier for them to lead healthier, more independent lives,” said CMS Administrator Seema Verma.

Of the 61 million people enrolled in Medicare last year, 20 million opted for Medicare Advantage, the privately run alternative to the traditional government program. Advantage plans limit members to a network of providers, and similar restrictions may apply to the new benefits. In California, 40 percent of Medicare beneficiaries have joined Medicare Advantage.

Many Medicare Advantage plans already offer some health benefits not covered by traditional Medicare, such as eyeglasses, hearing aids, dental care and gym memberships. However, the new rules, which the industry sought, will expand that list significantly, adding more items and services that are not directly medical.

CMS said the insurers will be permitted to provide care and devices that prevent or treat illness or injuries, compensate for physical impairments, address the psychological effects of illness and injuries, or reduce the need for emergency medical care.

Addressing a patient’s health and social needs outside the doctor’s office isn’t a new concept. In California, for example, the Institute on Aging, a nonprofit, offers social, psychological and health-related services for seniors and adults with disabilities. It has helped people in San Francisco and Southern California move from nursing homes back to their own homes, and it provides a variety of services and goods — from kitchen supplies to wheelchair ramps — that help improve their quality of life.

“By taking a more integrated approach to address people’s social and health needs, we have seen up to a 30 percent savings in health care costs compared to the costs of the same individuals before they joined our program,” said Dustin Harper, the institute’s vice president for strategic partnerships. The agency serves 20,000 Californians a year, including former nursing home residents who qualify for Medicare, the federally funded health insurance program for seniors, or Medicaid, the federal-state program for low-income people — or both.

The institute also provides a number of other innovative services. Volunteers and staff members answer calls to its toll-free, ’round-the-clock Friendship Line (800-971-0016), which is intended to combat social isolation and loneliness. In partnership with the city and county of San Francisco, the institute also offers subsidized home care for a small group of low- and middle-income people who don’t qualify for other assistance and could not otherwise afford it.

The organization also runs one of California’s 38 Multipurpose Senior Service Program sites, providing Medicaid-funded, home-based care. Some 33 social service organizations are MSSP providers, including the Partners in Care Foundation in Los Angeles, which operates four sites. About 2 million older adults and people with disabilities rely on Medicaid for home-based services to live at home for as long as possible.

Although Medicare Advantage insurers are still in the early stages of designing their 2019 policies, some companies have ideas about what they might include. In addition to transportation to doctors’ offices or better food options, some health insurance experts said additional benefits could include simple modifications inside beneficiaries’ homes, such as installing grab bars in the bathroom, or aides to help with daily activities, including dressing, eating and other personal care needs.

“This will allow us to build off the existing benefits that we already have in place that are focused more on prevention of avoidable injuries or exacerbation of existing health conditions,” said Alicia Kelley, director of Medicare sales for Capital District Physicians’ Health Plan, a nonprofit serving 43,000 members in 24 upstate New York counties.

Although a physician’s order or prescription is not necessary, the new benefits must be “medically appropriate” and recommended by a licensed health care provider, according to the new rules.

Many beneficiaries have been attracted to Medicare Advantage because of its extra benefits and the limit on out-of-pocket expenses. However, CMS also cautioned that new supplemental benefits should not be items provided as an inducement to enroll.

The new rules “set the stage to continue to innovate and provide choice,” said Cathryn Donaldson, of America’s Health Insurance Plans, a trade group.

“CMS is catching up with the rest of the world in terms of its understanding of how we keep people healthy and well and living longer and independently, and those are all positive steps,” said Ceci Connolly, chief executive officer of the Alliance of Community Health Plans, which represents nonprofit health insurance plans. Some offer non-emergency medical transportation, low-cost hearing aids, a mobile dental clinic and a “grocery on wheels,” to make shopping more convenient, she said.

UnitedHealthcare, the largest health insurer in the U.S., also welcomes the opportunity to expand benefits, said Matt Burns, a company spokesman. “Medicare benefits should not be one-size-fits-all, and continued rate stability and greater benefit design flexibility enable health plans to provide a more personalized health care experience,” he said.

This is one of several vans that provides door-to-door service for seniors and adults with disabilities going to medical appointments and programs at the Institute on Aging in San Francisco.

But patient advocates including David Lipschutz. senior policy attorney at the Center for Medicare Advocacy, are concerned about those who may be left behind. “It’s great for the people in Medicare Advantage plans, but what about the majority of the people who are in traditional Medicare?” he asked. “As we tip the scales more in favor of Medicare Advantage, it’s to the detriment of people in traditional Medicare.”

The details of the 2019 Medicare Advantage benefit packages must first be approved by CMS and will be released in the fall, when the annual open enrollment begins. It’s very likely that all new benefits will not be available to all beneficiaries since there is “tremendous variation across the country” in what plans offer, said Gretchen Jacobson, associate director of the Kaiser Family Foundation’s Program on Medicare Policy. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.)

In addition to next year’s changes in supplemental benefits, CMS also noted that a new federal law allows Medicare Advantage plans to offer benefits that are not primarily health-related for Medicare Advantage members with chronic illnesses. The law and the agency’s changes are complementary, CMS officials said. They promised additional guidance in the coming months to help plans differentiate between the two.

 

Hospitals are germy, noisy places. Some acutely ill patients are getting treated at home instead.

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Phyllis Petruzzelli spent the week before Christmas struggling to breathe. When she went to the emergency department on Dec. 26, the doctor at Brigham and Women’s Faulkner Hospital near her home in Boston said she had pneumonia and needed hospitalization. Then the doctor proposed something that made Petruzzelli nervous. Instead of being admitted to the hospital, she could go back home and let the hospital come to her.

As a “hospital-at-home” patient, Petruzzelli learned, doctors and nurses would come to her home twice a day and perform any needed tests or bloodwork.

A wireless patch would be affixed to her skin to track her vital signs and send a steady stream of data to the hospital. If she had any questions, she could talk via video chat anytime with a nurse or doctor.

Hospitals are germy and noisy places, putting acutely ill, frail patients at risk for infection, sleeplessness and delirium, among other problems. “Your resistance is low,” Petruzzelli said the doctor told her. “If you come to the hospital, you don’t know what might happen. You’re a perfect candidate for this.”

So Petruzzelli, who is now 71, agreed. That afternoon, she arrived home in a hospital vehicle. A doctor and nurse were waiting at the front door. She settled on the couch in the living room, with her husband, Augie, and dog, Max, nearby. The doctor and nurse checked her IV, attached the monitoring patch to her chest, and left.

When David Levine, the doctor, arrived the next morning, he asked Petruzzelli why she had been walking around during the night. Far from feeling uncomfortable that her nocturnal trips to the bathroom were being monitored, “I felt very safe and secure,” Petruzzelli said. “What if I fell while my husband was out getting me food? They’d know.”

After three uneventful days, she was “discharged” from her hospital-at-home stay. “I’d do it again in a heartbeat,” Petruzzelli said.

Brigham Health is one of a slowly growing number of health systems that encourage selected acutely ill emergency department patients to opt for hospital-level care at home.

In the couple of years since Brigham Health started testing this type of care, hospital staff who were initially skeptical have generally embraced it, Levine said. “They very quickly realize that this is really what patients want, and it’s really good care.”

This approach is quite common in Australia, Britain and Canada, but it has faced an uphill battle in the United States.

A key obstacle, clinicians and policy analysts agree, is getting health insurers to pay for it. At Brigham Health, the hospital can charge an insurer for a physician house call, but the remainder of the hospital-at-home services are covered by grants and other funding, Levine said.

Insurers don’t have a position on hospital-at-home programs, said Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, an industry trade group.

“Overall, health insurance providers are committed to ensuring patients have access to care they need, and there are Medicare Advantage plans that do cover this type of at-home care,” Donaldson said in a statement.

Levine, a clinician-investigator at Brigham and Women’s Hospital and an instructor at Harvard Medical School, was the lead author of a recently published study comparing patients who received either hospital-level care at home or in the hospital in 2016.

The 20 patients analyzed in the trial had one of several conditions, including infection, heart failure, chronic obstructive pulmonary disease and asthma. The trial found that while there were no adverse events in the home-care patients, their treatment costs were significantly lower — about half that of patients treated in the hospital.

Why? For starters, labor costs for at-home patients are lower than for patients in a hospital, where staff must be on hand around the clock. Home-care patients also had fewer lab tests and visits from specialists.

The study found that both groups of patients were about equally satisfied with their care, but the home-care group was more physically active.

Brigham Health is conducting further randomized controlled trials to test the at-home model for a broader range of diagnoses.

Bruce Leff began exploring the hospital-at-home concept more than 20 years ago, conducting studies that found fewer complications, better outcomes and lower costs in home-care patients.

Hospitals, accustomed to the traditional business model that emphasizes filling hospital beds in a bricks-and-mortar facility, have been slow to embrace the idea, however.

There are practical hurdles, too.

“It’s still easier to get Chinese food delivered in New York City than to get oxygen delivered at home,” said Leff, a professor of medicine and director of Johns Hopkins Medical School’s Center for Transformative Geriatric Research.

Since the seven-hospital Mount Sinai system in New York launched its hospital-at-home program, more than 700 patients have chosen it. And they have fared well on a number of measures.

The average length of stay for acute care was 5.3 days in the hospital vs. 3.1 days for home-care patients, while 30-day readmission rates for home-based patients were about half of those who had been hospitalized: 7.8 percent vs. 16.3 percent.

Begun with a $9.6 million federal grant in 2014, Mount Sinai’s program initially focused on Medicare patients with six conditions, including congestive heart failure, pneumonia and diabetes. Since then, the program has expanded to include dozens of conditions, including asthma, high blood pressure and serious infections such as cellulitis, and is now available to some privately insured and Medicaid patients.

Mount Sinai has also partnered with Contessa Health, a company with expertise in home care, to negotiate contracts with insurers to pay for hospital-at-home services.

Among other things, insurers are worried about the slippery slope of what it means to be hospitalized, said Linda DeCherrie, clinical director of the mobile acute care team at Mount Sinai.

Insurers “don’t want to be paying for an admission if this patient really wouldn’t have been hospitalized in the first place,” DeCherrie said.

 

Walmart reportedly in negotiations to buy Humana

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Credit: Google Street View

 

Deal has been long speculated since announced $69 billion merger between CVS Health and Aetna.

Walmart is in preliminary negotiations to buy Humana, The Wall Street Journal has reported.

There are few details in the potential deal that has not been announced publicly by either the retailer or the insurer.

But speculation has existed among industry analysts for months after the announced $69 billion merger between CVS Health and Aetna.

Two years ago, Aetna was in a proposed $34 billion deal to buy Humana.

Walmart is facing increased competition from such an integrated pharmacy business and is currently in an arms race against Amazon as the online giant has made strides into the Medicaid market by offering those beneficiaries a discounted Prime membership.

Humana specializes in Medicare Advantage plans for seniors, a fast-growing demographic as baby boomers enter retirement age.

The Centers for Medicare and Medicaid Services has shown support for MA plans, said David Friend, MD, chief transformation officer of The BDO Center for Healthcare Excellence & Innovation.

Friend predicts that due to the partnerships and mergers between healthcare companies, retailers and insurers, the traditional pharmacy benefit model could become extinct.

“The CVS-Aetna merger was a watershed moment in healthcare. But Walmart-Humana signifies the beginning of the avalanche that will cause the entire healthcare system to converge,” Friend said by statement. “And as this deal signifies, the healthcare organization that accurately captures and analyzes the data of the fast-growing U.S. demographic — seniors — stands to lead the industry of the future.”

 

Traditional Medicare Doesn’t Cover Dental Care. That Can Be a Big Problem.

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Traditional Medicare Doesn’t Cover Dental Care. That Can Be a Big Problem.

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Many people view Medicare as the gold standard of United States health coverage, and any attempt to cut it incurs the wrath of older Americans, a politically powerful group.

But there are substantial coverage gaps in traditional Medicare. One of them is care for your teeth.

Almost one in five adults of Medicare eligibility age (65 years old and older) have untreated cavities. The same proportion have lost all their teeth. Half of Medicare beneficiaries have some periodontal disease, or infection of structures around teeth, including the gums.

Bacteria from such infections can circulate elsewhere in the body, contributing to other health problems such as heart disease and strokes.

And yet traditional Medicare does not cover routine dental care, like checkups, cleanings, fillings, dentures and tooth extraction.

After I wrote a recent article about the lack of coverage for dental care in many state Medicaid programs, I received a lot of feedback from readers saying Medicare was no better.

I have not had dental coverage since I retired 25 years ago. Any problems and I have to go to a foreign country to get treatment that I can afford. It is incredible that there is no coverage available in America for one of the most important aspects of health and wellness care for seniors. — Tom, La Jolla

Several of my elderly relatives have just let teeth fall out without being cared for or replaced because of expense. This is no way to care for our senior citizens. — Bronxbee, Bronx

Paying for dental care out of pocket is hard for many Medicare beneficiaries. Half have annual incomes below $23,000 per year. Those who have the means, but are looking for a deal, might travel abroad for cheaper dental care. Tens of thousands of Americans go to Mexico every year for dental work at lower prices. Many others travel the globe for care.

Although low-income Medicare beneficiaries can also qualify for Medicaid, that’s of little help for those living in states with gaps in Medicaid dental coverage.

According to a study published in Health Affairs, in a given year, three-quarters of low-income Medicare beneficiaries do not receive any dental care at all. Among higher-income beneficiaries, the figure is about one-quarter.

“The separation of coverage for dental care from the rest of our health care has had dramatic effects on both,” said Amber Willink, the lead author of the study and a researcher at Johns Hopkins Bloomberg School of Public Health. “As a consequence of avoidable dental problems, the Medicare program bears the cost of expensive emergency department visits and avoidable hospitalizations. It’s lose-lose.”

Traditional Medicare will cover dental procedures that are integral to other covered services. So if your Medicare-covered hospital procedure involved dental structures in some way, important related dental care would be covered. But paying for any other care is up to the patient.

Lack of dental coverage by Medicare is among the top concerns of beneficiaries. The program also lacks coverage for hearing, vision or long-term care services. However, many Medicare Advantage plans — private alternatives to the traditional program — cover these services.

For example, 58 percent of Medicare Advantage enrollees have coverage for dental exams. In receiving these benefits through private plans, enrollees are also subject to plans’ efforts to limit use by, for example, requiring prior authorization or offering narrow networks of providers. These restrictions can be problematic for some beneficiaries, and about two-thirds of Medicare beneficiaries opt for the traditional program, not a private plan.

Adding a dental benefit to Medicare is popular. A Families USA survey of likely voters found that the vast majority (86 percent) of likely voters support doing so. The survey also found that when people do not see a dentist, the top reason is cost.

Ms. Willink’s study estimated that a Medicare dental benefit that covered three-quarters of the cost of care would increase Medicare premiums by $7 per month, or about 5 percent. The rest would need to be financed by taxes.

The cost of such a benefit might be offset — or partly offset — by reductions in other health care spending, reflecting the fact that poor oral health contributes to other health problems.

Making a case for this in the political arena would not be easy, though. The initial cost would be an inviting target for politicians who express concern about fiscal prudence, regardless of any potential long-term gain. But expanding Medicare has been done before.

In 2006, a prescription drug benefit was added to the program. The law for that program was enacted in 2003, and in that same year, the surgeon general released a report calling for dental care to be treated and covered like other health care. Whether by Medicaid or Medicare, that wish is still unfulfilled.