Volume 26, Number 34
October 3, 2016
Strategic Business, Financial and Regulatory News of the Health Insurance Industry
Contents
3
Deadline for Plans to Enter
Or Leave Exchanges Brings
New Exits
5
Additional Health Plan
News of the Week
4
Table: 2016 vs. 2017
SHOP Insurance Premiums,
Average by Metal Level
7
Health Plan Briefs
Insurers Are Blamed for Not Meeting ACA
Rules, Delaying Opioid Addiction Coverage
The utilization management restrictions that health insurers place on opioid addiction treatments are making the national epidemic of heroin and other opioid abuse
worse because tools like prior authorization are especially harmful to addicts, say substance abuse experts. While admitting there is a definite problem, a health care industry
consultant says health plans are improving their coverage policies, albeit not at a fast
enough pace for some.
There was no response from America’s Health Insurance Plans when asked for
clarification of industry opioid addiction treatment practices.
“Historically, addiction was not really covered by insurance plans,” says Lindsey
Vuolo, associate director of health law and policy, National Center on Addiction and
Substance Abuse. “Most of the funding came from state block grants. But, with insurance reform and moving addiction treatment more into mainstream health care, there
have been certain reforms on insurance companies to cover this type of treatment.” For
instance, addiction treatment is an essential health benefit under the ACA marketplace
rules and there are stipulations on coverage in the Mental Health Parity and Addiction
Equity Act as well.
continued on p. 5
Medical Cost, Utilization Trends Show
Blips, but Moderation Remains in Force
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While medical cost trend and health care utilization rates remain moderate by historical standards, industry consultants and Wall Street analysts continue to watch for
signs of life, so to speak, in hospital volumes and other cost drivers for insurers. Even
though there were just such signs in August of more surgeries for instance than a year
ago, one factor — the high cost of specialty drugs — remains more significant than
slight month-to-month data fluctuations, these sources indicate.
And when it comes to pharmacy spend, the divergence of utilization and unit cost
is an interesting and enduring phenomenon, says David Dross, head of the pharmacy
practice for Mercer LLC, a unit of Marsh & McLennan. “What we see in pharmacy is
that the actual number of units, or in other words prescriptions per year, really isn’t
growing that much, only about 1% or so a year,” he tells HPW. “What we are really seeing is significant cost increases. I think the biggest area is obviously the specialty biotech
drugs, which are already about 35% of the cost typically for 1% to 2% of members or
scripts. That is trending at double digits annually and will continue.”
And it’s not just specialty drugs. “We do see situations where brand drugs that are
non-specialty brand drugs and that are getting to the end of their patent, oftentimes
the manufacturers will increase prices to get additional revenue right before the patent
wears out,” Dross says, stressing this is not a huge cost driver but something to note.
“In the last year or two, it has not been as big of a deal as biotech. We have also seen
in some situations relatively old generic drugs have had fairly big price increases. This
is largely as a result of the fact if they have been out there for a while, they are sort of a
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2 Health Plan Week
commodity and the margin for the people manufacturing
it is relatively low,” he explains. Eventually, the original
generic manufacturer, and then some competitors, drop
out of the market, leaving just a couple of manufacturers
remaining. “In that situation those entities, recognizing
that there is less competition, may actually increase prices fairly substantially in order to get additional revenue
and additional margin,” Dross says.
Craig Oberg, managing consultant for The Burchfield Group in St. Paul, Minn., tells HPW that despite
insurers’ best efforts, specialty drug costs are unpredictable. “Many times you don’t see it coming. All of the
sudden you’ve got an individual with a rare disease and
there you go,” he says.
And short of denying coverage, there are only a few
management strategies for this population. “You combat
it as best you can, make sure they are living up to FDAapproved indications, that it’s being dosed appropriately,
that they are ordering and re-ordering in appropriate
quantity and frequency. But you are still faced with the
expense,” Oberg says.
The new drugs, like the specialty drugs for hepatitis
C, actually cure diseases and should lower utilization
rates for medical care in the longer term.
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October 3, 2016
“You are effectively treating conditions that before
were untreatable or poorly treated and that is going to
show up on the medical side with lower emergency room
visits and hospitalizations,” Oberg says. “The thing is
you need to be careful of how are you counting. From
what you are describing you are looking at medical prices
in isolation, then you are looking at pharmacy trends in
isolation. Every plan or payer should actually be adding
those two together to get a true cost trend assessment.”
There are also technology improvements keeping
non-pharma medical trends moderate, reducing stays in
hospitals for things like hip replacements. “That used to
be a multi-day hospitalization but now are same-day,”
Oberg says.
Insurers Have PBM Businesses at Stake
There are different factors affecting the handful of
insurers like UnitedHealth Group and Cigna Corp. that
own their own PBM businesses. “It is a little bit of both
[negative and positive],” Dross says. “A large medical
carrier will have a portion of their business fully insured
and a portion self-insured. For the portion fully insured,
honestly, it may be a detriment if they don’t underwrite
for it completely. Then obviously they may lose money or
may not make as much as a result of that [pharma costs].
You can’t change rates in the course of the year.”
But if by accurately pricing for it, an insurer’s fully
insured rate is higher than that of its competitors, then
they may either lose business or not gain new business,
Dross says.
“Now on the self-insured side there is some margin
they make in the self-insured environment, because in
essence they are buying the drug from a wholesaler or
manufacturer for X and in effect selling to the plan sponsor for Y. And there is some spread, which varies by drug
and carrier. In that situation they would see some margin
or profit for that particular drug.”
It also presents a marketing opportunity for these
large carriers’ self-funded business, Oberg says. For
example, UnitedHealthcare “is on the hook for a lot of
pharmacy expenses when you look at their fully insured
and ASO [administrative services only] businesses. They
will present to large employers who are going to approach it as sort of a carve-out situation by saying ‘you
know, we’ve got a lot of skin in this game too,’” he says.
“‘So the decisions we make on how to assist you and
how we manage the prescription drug benefit impacts
our bottom line directly.’ Express Script or Caremark —
they cannot make the same claim.”
Wall Street analysts’ tracking of utilization trends
shows that as a whole the hospital/provider business
remains soft, even though August had some positive features for providers like an increase in the number of sur-
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October 3, 2016
Health Plan Week
geries. According to the Credit Suisse Hospital Volume
Tracker, which tracks key hospital-based volume metrics
for 400-plus acute-care hospitals, there was a rebound in
inpatient discharge growth in August 2016 versus a year
ago. But this was largely due to the fact that August 2016
had 23 business days when compared to the 20 last August, the group said.
Still, the investment bank stressed, “surgical trends
also showed a nice rebound, with inpatient surgeries up
8.1% year/year in August and outpatient surgeries up
11.3% y/y.” Overall, however, the longer-term trends
point to “continued softness in inpatient and outpatient
volumes through third-quarter 2016, although surgical
activity is now tracking positively for the quarter.”
This trend is positive for health insurers and other
payers, but not good for most hospitals still operating
in the fee-for-service environment. In a Sept. 29 research
note, Michael Wiederhorn, analyst for Oppenheimer &
Co., said “the hospital group has remained volatile in
recent months” as the industry has faced tough volume
performances along with Affordable Care Act (ACA)related uncertainty in front of a presidential election.
“We believe the environment remains challenging
near term as we expect admission trends to remain under
pressure, while investors remain concerned about a significant overhaul of the ACA,” he said. “We believe these
concerns remain overblown as we believe a new president would not entirely dismantle the ACA, but instead
look to make tweaks around the edges and improve
access to options for more Americans. While the environment will likely remain challenging over the next quarter,
the attractive valuations for the group could draw interest into the group after the election.”
Providers, Payers See Varying Impact
A third Wall Streeter, Ralph Giacobbe, securities analyst for Citi, predicted in a Sept. 7 report that health care
utilization will continue to decelerate into the second half
of this year and 2017.
He said in general, “we believe the health care industry is beginning to see volume soften as ACA tailwinds
wane.” But these trends are not affecting every insurer or
provider the same way, Giacobbe said, citing a number
of statements from health care executives during secondquarter earnings calls.
For example, he pointed to the comments of Anthem, Inc. CFO John Gallina, who in a July 27 call with
analysts (HPW 8/1/16, p. 1) said that “really what we’ve
seen is that we’ve got an elevated amount of utilization
specifically in the ACA individual compliant plans as
well as in Medicaid and most significantly, they’re in
Iowa. And we’re at least, for purposes of our outlook,
assuming that that elevated level is going to continue
3
throughout the rest of the year,” he said. “So, while certainly if there’s any mitigation factors or medical management initiatives end up being more successful than
we’re planning, there could be upside.”
Gallina said on cost trend that the primary drivers
are pharmacy, nursing facilities, emergency room and
outpatient surgery.
Other executives reported differing fluctuations in
their cost and utilization data. And outside the provider
and payer world, CVS Health Corp. on Sept. 20 said in
its Mid-2016 Trend Analysis that “despite ongoing price
inflation and an increase in utilization, prescription drug
trend dropped for a majority of CVS Health PBM clients
in the first half of 2016. In fact, by midyear, more than a
third of PBM clients had negative trend. Just two years
ago, more than half of all PBM clients had trend in the
double digits. At the end of 2015, trend had declined to
5%. Aggressive management appears to continue to push
trend down in 2016.”
Contact Wiederhorn at michael.wiederhorn@opco.
com, Giacobbe at [email protected], Dross via
Bruce Lee at [email protected] and Oberg at [email protected]. G
Deadline for Plans to Enter or
Leave Exchanges Brings New Exits
More health insurers told the federal government by
a Sept. 23 CMS deadline that they would not be participating in public exchanges for 2017, leaving Wall Street
concerned those carriers left behind may absorb more
sick and costly enrollees from exiting plans. At the same
time, CMS on Sept. 27 unveiled a new program to entice
younger and healthier millennials to the marketplaces as
part of an outreach effort with the goal of avoiding adverse risk selection, which could chase even more insurers away the year after next.
The latest Affordable Care Act (ACA) exchange
departure to catch attention was BlueCross BlueShield
of Tennessee’s exit from the state’s three largest metro
markets: Knoxville, Memphis and Nashville. By leaving these three areas, the Blues plan is exiting 30 of the
state’s 95 counties and most of its exchange membership.
It also marks a continued erosion in plan participation
across the country, which has seen not only financially
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4 Health Plan Week
challenged Consumer Operated and Oriented Plans
(CO-OPs) fail, but small insurers like Oscar Health trim
markets and many of the national insurers like Aetna Inc.
and UnitedHealth Group abandon most of the exchanges
for 2017.
In a Sept. 26 research note, Scott Fidel, securities
analyst for Credit Suisse, said the Blues plan’s exit came
for many of the same reasons that drove the other departures. “BCBS of Tennessee now expects aggregate
losses from the public exchanges to reach $500 million by
year-end 2016. BCBS of Tennessee’s scale back from the
exchanges follow the news from fellow non-profit Blues
plan, BCBS of Nebraska, that it will exit its state’s entire
public exchange market for 2017,” he said. “While BCBS
of Nebraska will exit a larger geographic footprint, BCBS
of Tennessee’s departure from 30 counties will affect a
significantly larger membership base.”
Currently, the Tennessee Blues plan has around
112,000 exchange enrollees in Nashville (52,000), Knoxville (31,000) and Memphis (29,000) versus BCBS of Nebraska’s 25,000 enrollees statewide.
With the Tennessee Blues plan gone, the two remaining carriers may see a big impact, Fidel added. “Cigna
[Corp.] and Humana [Inc.] could now end up with more
exchange exposure in Tennessee: As a result of BCBS of
Tennessee’s exit from the largest metro areas in the state,
there will only be one or two insurers left in each of the
30 counties BCBS of Tennessee is leaving. This is because
UnitedHealth [Group] has announced its exit from the
entire state.”
The way it stands now, Humana would be the sole
carrier in 15 Tennessee counties in 2017, and the remaining 15 markets of the 30 the Blues plan is leaving would
have Humana and Cigna competing.
“However, recall that Humana has announced it will
only offer individual plans in 156 counties in 11 states;
reflecting a meaningful reduction from its current 1,351
counties across 19 states (we do not yet know which are
the specific counties Humana will be leaving),” he said.
State regulators had already approved the Tennessee
Blues plan for a rate increase of 62% across all the counties it originally planned to compete in for 2017, versus
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October 3, 2016
the reduced number now. Cigna received approval for
a 46.3% rate hike and Humana a 44.3% rate jump. “We
continue to expect an extremely volatile 2017 public exchange open enrollment period (which starts Nov. 1) as
potentially 30-40% or more of the existing market will
need to find a new plan due to all of the announced carrier exits,” Fidel said.
Nebraska Plan Says So Long to Exchanges
For its part, the Nebraska Blues plan told its members on Sept. 23 that “serious issues with the health care
law have made the public marketplace unstable, which
is driving increased costs and decreased competition and
consumer choice. In fact, since we began selling our individual plans on the ACA’s public marketplace, we have
lost approximately $140 million.”
The insurer said it will continue to offer some individual plans on the private market through either a
licensed agent or its website. “We will evaluate the feasibility of a possible return to the public marketplace in
2018 based on its improved stability,” the carrier added.
Among other comings and goings announced at the
deadline: Highmark Health in Pittsburgh committed to
the exchanges, despite losing some $800 million in the
segment since 2013, and Blue Cross Blue Shield of Texas
said it also would stay in its state exchange, with plans
to sell policies in all 254 counties. But Indiana University
Health Plans said it will not offer coverage on that state’s
exchange in 2017, leaving around 27,000 people to look
for another insurer. The carrier said it would still sell offexchange individual plans.
Feds Try to Get Younger, Fast
To help entice some of the fleeing insurers to come
back in 2018, and to improve the health of the risk pool
in general, CMS on Sept. 27 unveiled a new campaign
to enroll young adults, a group sorely missing from the
demographic makeup of exchange enrollees, according
to health plans.
Unveiled as part of the administration’s White
House Millennial Outreach and Enrollment Summit,
the outreach will focus on online platforms that cater
to younger adults, like the gamer platform Twitch. The
effort includes “HealthCare.gov pre-roll before videos,
a homepage takeover, and ongoing efforts with streamers on Twitch to amplify our message throughout Open
Enrollment,” CMS said.
According to Timothy Jost, Ph.D., emeritus professor, Washington and Lee University School of Law, the
importance of this step may be lost on older generations,
but could be vital for the outreach drive. “For those of
you who, like me, cannot fully grasp the intricacies of
this [Twitch] statement, it’s worth noting that 10 million
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October 3, 2016
Health Plan Week
daily active users, many of them 18-36 year olds, currently spend 106 minutes per-day, per-person on Twitch,” he
said in a blog posting.
CMS also wants to bolster its functionality on mobile devices, notably by improving the health insurance
shopping experience. In addition, the agency is conducting a coordinated social media outreach campaign to
young adults under the umbrella #HealthyAdulting and
working with a slew of youth, ethnic, medical, disability,
women’s and religious groups to conduct outreach via
social media.
Contact Jost at [email protected] and Fidel at [email protected]. G
Opioid Treatments Test Plans
continued from p. 1
She points to one utilization management technique
as a major barrier. “Prior authorization is particularly
onerous because addiction affects the part of the brain
that is associated with motivation, decision-making,
self-care and impulse control,” Vuolo tells HPW. “So if a
patient is willing to engage in treatment there may be a
narrow window to do that. Anything that impedes their
access, like having to wait several days for an insurance
company to approve treatment, can cause patients to go
into withdrawal very quickly.”
Another troublesome utilization management practice is the use of lifetime limits on medications. “There
really is no justification for them. Again, this is a chronic
and relapsing disease and we don’t see, for instance, such
limits on heart disease or diabetes. This is really a disease
that can be managed effectively but it is not something
that necessarily can be cured one time,” she adds.
A Health Affairs study published in June also examined the problem. In an article titled, “Risk-Adjustment
Simulation: Plans May Have Incentives To Distort Mental
Health And Substance Use Coverage,” authors said under the ACA, “the risk-adjustment program is designed
to compensate health plans for enrolling people with
poorer health status so that plans compete on cost and
quality rather than the avoidance of high-cost individuals.” What they found was coverage shortfalls because
the risk adjustment formula did not remove incentives
for plans to curb coverage in the mental health and substance abuse disorder areas.
Bryan Cote, managing director for Berkeley Research, LLC, tells HPW that the complications of opioid
addiction and the lives of those needing help play into
the complex response from health plans. First off there
is the physical issue of where treatment can be administered and monitored, as insurers see patients “floating”
and “rotating” in and out of hospitals, correctional facili-
5
ties, detox centers and other drug diversion programs
with many of those addicted qualifying for Medicaid as
well.
“The commercial insurers are to some extent getting
better at covering that treatment, like by allowing for longer stays for inpatient care to address the addiction and
for curing issues like depression, which may be a cause
to begin with,” he says.
But Vuolo says the core issue is that more treatment
needs to be administered to more of those addicted to
heroin and other opioids, as well as other drugs, in a way
that promotes access and successful outcomes. And this
comes at a time the situation is a true epidemic.
“The problem is most people are not getting treatment services for addiction,” she says. Evidence of this
came in a recent study by the IMS Institute for Healthcare Informatics and Advocates for Opioid Recovery, in
which it was estimated that 2.4 million people are still in
need of treatment or effective care for opioid addiction.
FDA Has Approved Three Meds
Three FDA-approved medications used in medication-assisted treatment (MAT) for opioid addiction
get the most attention when it comes to insurers’ coverage decisions. Vuolo says MAT involves a combination
of behavioral therapy with FDA-approved medications. “The FDA-approved medications are methadone,
buprenorphine (oral or implantable), buprenorphine in
combination with naloxone (Suboxone), oral naltrexone
and long-acting, injectable naltrexone (Vivitrol),” she
explains.
These medications are not widely covered by insurance plans — so most patients are not being treated with
the therapies. “Our Uncovering Coverage Gaps Report
found that the 2017 Essential Health Benefits benchmark
plans for seven states exclude methadone and none of
the plans explicitly covered all of the FDA-approved
medications for opioid addiction. We also spoke about
some of the treatment limitations (utilization manage-
Additional News of the Week
Coverage of these health plan developments was
included in this week’s issue of Spotlight on Health
Insurers:
• Wellmark Trims Broad-Network Options
• UnitedHealthcare at Odds With Spartanburg
• ConnectiCare and CliniSanitas to Open Centers
• MDwise Partners With Valence Health
Links to these additional news stories can be accessed
at www.AISHealth.com/enews/spotlightonhealthinsurers.
Copyright © 2016 by Atlantic Information Services, Inc. All rights reserved.
Please see the box on page 2 for permitted and prohibited uses of Health Plan Week content.
6 Health Plan Week
October 3, 2016
ment practices, such as prior authorization, dosage limits,
‘fail first’/step therapy) imposed by health insurers that
can create additional barriers for patients,” Vuolo says.
Under step therapy, insurers require patients to try
a first-line treatment initially, and move on to another
therapy only after the first drug fails.
Vuolo also says more research is needed on service
utilization to understand what specific addiction treatment services people are receiving. “Recent studies show
2016 vs. 2017 SHOP Insurance Rates,
Average by Metal Level for Eight States
State
Colorado
Connecticut
Kentucky
Maryland
New Mexico
Oregon
Rhode
Island
Vermont
Metal
Level
2016
2017
Change
%
Change
Bronze
$295.27
Silver
$362.65
$297.52
$2.25
0.76%
$380.80
$18.15
Gold
5.01%
$419.41
$422.00
$2.60
0.62%
Platinum
$403.74
$424.31
$20.57
5.10%
Bronze
$315.92
$302.32
-$13.60
-4.30%
Silver
$418.02
$411.81
-$6.21
-1.49%
Gold
$516.81
$528.17
$11.36
2.20%
Platinum
$574.10
$661.02
$86.92
15.14%
Bronze
$262.00
$280.41
$18.41
7.03%
Silver
$352.22
$349.13
-$3.09
-0.88%
Gold
$353.55
$404.49
$50.93
14.41%
Platinum
$317.16
N/A
N/A
N/A
Bronze
$227.91
$253.92
$26.01
11.41%
Silver
$289.76
$297.09
$7.33
2.53%
Gold
$367.82
$371.61
$3.79
1.03%
Platinum
$447.54
$421.54
-$26.00
-5.81%
Bronze
$247.96
$270.00
$22.04
8.89%
Silver
$320.19
$349.32
$29.12
9.10%
Gold
$371.98
$391.41
$19.43
5.22%
Platinum
$411.56
$435.15
$23.59
5.73%
Bronze
$248.40
$257.60
$9.21
3.71%
Silver
$308.04
$315.21
$7.18
2.33%
Gold
$368.05
$379.56
$11.52
3.13%
Platinum
$399.63
$415.92
$16.29
4.08%
Bronze
$224.54
$236.65
$12.11
5.39%
Silver
$303.91
$326.90
$23.00
7.57%
Gold
$369.99
$380.61
$10.62
2.87%
Platinum
$429.39
$473.43
$44.04
10.26%
Bronze
$397.08
$430.66
$33.58
8.46%
Silver
$476.06
$503.15
$27.09
5.69%
Gold
$547.52
$578.84
$31.32
5.72%
Platinum
$658.53
$682.97
$24.44
3.71%
Notes: Average premiums among all plans offered for a non-smoking
40-year-old individual; Vermont does not differentiate premium rates
by age. NA=No insurers offered products in the state for the metal
level indicated.
SOURCE: PBX, Health Insurance Exchange Database. Visit https://
aishealthdata.com/pbx for more information and https://aishealthdata.
com/dashboard/pbx/demo/pbx to explore a free demo version of this
online database.
that addiction treatment spending and the number of
people receiving addiction treatment has remained flat
despite the increased demand for treatment caused by
the opioid epidemic,” she says.
Her group’s goal is to see better coverage of MAT
because it is an effective and life-saving treatment for
opioid addiction. “Plans should cover all of the FDAapproved medications for the treatment of opioid addiction and make sure any treatment limitations are as least
restrictive as possible, so patients can access effective care
when needed,” Vuolo says.
Insurers Favor Doctor Involvement
Cote says commercial insurers and Medicaid managed care plans generally prefer the Suboxone treatment
method because it comes with the involvement of a primary care physician who is specially certified to work
with the medication. “Methadone is a lot cheaper but
does not have the same primary care model,” he says.
In a wider sense, insurers are more skeptical of
addiction treatment options and their effectiveness
compared to those for most other chronic conditions.
Patients, who often have to work through various treatments to find one that works best for them personally,
may end up back in the emergency department or other
settings, including prison.
This sentiment that cures for addicts are uncertain
has led many insurers to take a long-range view of the
situation and target patients’ exposure to opioids. “Some
of these policies are, say, allowing a primary care physician or specialist to prescribe only a certain number of
opioids, or none at all. It is a shift that may take five years
to really show anything, but that is how many plans
are addressing addiction, which they view as less of a
Band-Aid approach. Many of them say Suboxone is a
Band-Aid, and they have a ton of problems with treatment centers that can charge $1,000 or $2,000 a day and a
month later the patient is in relapse.”
Some health plans are also contracting differently
to reward providers who have more evidence-based
approaches to the problem, and employ mental health
experts and other specialists to deal with depression
or post-traumatic stress disorder as well as the resulting opioid addiction. An unnamed Blue Cross and Blue
Shield plan, Cote says, pays a ballpark $1,100 a day for
a partial hospital treatment program for opioids versus
$800 a day for a provider without the credentialed staff.
“If you don’t have internal medicine specialists or psych
staff specifically dealing with, say, depression, then you
contract at the lower rate,” he adds.
Contact Cote at [email protected] and Andrea
Roley for Vuolo at [email protected]. G
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October 3, 2016
Health Plan Week
7
HEALTH PLAN BRIEFS
u House Republicans on Sept. 27 passed a bill
that would exempt people from the Affordable
Care Act’s (ACA) individual mandate if they lost
coverage due to the closure of their Consumer
Operated and Oriented Plan (CO-OP). The 258-165
vote was mostly along party lines. President Obama
has threatened to veto the bill should companion legislation in the Senate win approval. Democrats say
the exemption is not needed since individuals who
lost their CO-OP coverage can use a special sign-up
period to find other insurance. The bill is H.R. 954,
the CO-OP Consumer Protection Act of 2016. Visit
http://tinyurl.com/z7op9vp.
u Three New Jersey hospitals owned by CarePoint
Health filed a lawsuit (Case 2:16-cv-05922) on
Sept. 26 against Horizon Blue Cross Blue Shield
in U.S. District Court for the District of New Jersey
demanding $76 million. The plaintiffs alleged the
insurer shortchanged them by that amount between
June 2015 and Sept. 20 of this year because of network status. “The CarePoint Hospitals’ claims arise
from Horizon’s intentional and unlawful pattern of
drastically underpaying and/or refusing to pay the
CarePoint Hospitals for claims submitted to Horizon
for reimbursement for medical treatment provided
to patients when the CarePoint Hospital was out
of network with Horizon,” the suit said. CarePoint
further said Horizon paid the hospitals only a small
amount of “usual, customary and reasonable rates”
for emergency department and elective care charges.
Media reports say Horizon has threatened to countersue CarePoint for what the carrier calls excessively
high rates. Visit http://tinyurl.com/hpjqnhs.
u Aetna Inc. on Sept. 27 said it will combine the
insurer’s wellness and care management programs with Apple Inc.’s Apple Watch, iPhone and
iPad, which are used for tracking physical activity
and health status by millions of people. “Beginning this fall, Aetna will make Apple Watch available
to select large employers and individual customers
during open enrollment season, and Aetna will be
the first major health care company to subsidize a
significant portion of the Apple Watch cost, offering
monthly payroll deductions to make covering the
remaining cost easier,” Aetna said. In addition, the
insurer will provide Apple Watch free to its 50,000
employees, “who will participate in the company’s
wellness reimbursement program, to encourage
them to live more productive, healthy lives.” The
collaboration is also aimed at improving medication
adherence, integrating insurance billing with Apple
Wallet and linking Aetna members to personalized
messaging and decision support. Visit http://tinyurl.com/h2lynnk.
u In answer to the concerns of CMS and its contractors, the HHS Office of Inspector General (OIG)
said in a brief released on Sept. 27 that there
has been a billing surge for new-style noninvasive
pressure support ventilators. What OIG found is
a situation “ripe for abuse,” the watchdog said in
its report (OEI-12-15-00370). “In recent years, ventilator technology has evolved so that it is possible
for a single device to treat numerous conditions by
operating in several different modes. This creates
an opportunity for abuse, whereby suppliers could
bill Medicare for the device as if it were being used
as a ventilator,” instead of using a lower-cost device
as indicated based on the patient’s medical condition. OIG noted that CMS took action in January to
consolidate billing codes for ventilators, which may
reduce excess reimbursement for noninvasive pressure support ventilators. But more will need to be
done, such as stricter reimbursement reviews by the
agency, OIG said. Visit http://tinyurl.com/gwgmtf9.
u Cigna Corp. on Sept. 27 said it will expand access to affordable telehealth services for people
enrolled in company-administered medical and
behavioral health plans for 2017. The insurer will
do this by adding telehealth vendor AMWELL (by
American Well) to its existing telehealth offering
provided by MDLIVE, “both as a standard telehealth
benefit for most of Cigna’s U.S. employer-sponsored
group health plans, as well as many of its individual
health plans on and off public marketplace exchanges.” Each of the services operates national medical
networks that are able to treat minor medical conditions such as allergies, cold, flu and sinusitis. At the
start of next year, Cigna also will add telehealth video consultations for members using the company’s
contracted behavioral health professionals. “Customers who have mental health/substance abuse benefits with Cigna will have the option for individual
therapy or medication management through videobased services. There is no additional cost for these
behavioral services to customers or their employers,
with the same cost share applying to video-based
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8 Health Plan Week
October 3, 2016
HEALTH PLAN BRIEFS (continued)
services as face-to-face office visits,” the carrier said.
Visit http://tinyurl.com/h36bpsh.
u With the aid of rampant media reporting and increased vigilance, concussion diagnoses skyrocketed from 2010 to 2015, according to a Sept. 27
report by the Blue Cross Blue Shield Association
(BCBSA), with those in the 10- to 19-year-old age
group seeing the biggest jump. The report, “The
Steep Rise in Concussion Diagnoses in the U.S.,” is a
comprehensive study of medical claims for 936,630
diagnosed concussions suffered by BCBS commercially insured members. Among the findings: concussion diagnoses climbed 71% for patients ages 10
through 19 during the six-year study period. Meanwhile, such diagnoses for adults ages 20 through 64
rose 26%, the study said. “Fall is the peak concussion
season for patients ages 10 through 19 with the most
dramatic increases seen among males. Concussion
diagnoses for young males in fall are nearly double
that of young females,” BCBSA said. Visit http://
tinyurl.com/jb6ugh2.
u Once was not enough. For the second time in
weeks, a group of five Senate Democrats on Sept.
23 pressed Aetna to answer questions pertaining
to the insurer’s merger attempt with Humana Inc.
and its decision to exit most ACA exchanges (HPW
9/19/16, p. 8). In the new letter to Aetna CEO Mark
Bertolini, Sens. Elizabeth Warren (D-Mass.), Bernie
Sanders (I-Vt.), Edward Markey (D-Mass.), Sherrod
Brown (D-Ohio) and Bill Nelson (D-Fla.) said the insurer did not answer any of the 12 questions it asked
in the original Sept. 8 letter. “Your lack of cooperation does not mollify our concern that Aetna appears
to be attempting to force the Justice Department
into approving its controversial merger by threatening access to coverage for millions of Americans,”
wrote the senators. The group of five said despite the
serious legal risk that the proposed Aetna-Humana
merger would be rejected, Aetna agreed to pay
Humana $1 billion if the transaction was not completed by year-end 2016. “Our September 8th letter
included a number of questions about the nature of
Aetna’s ‘unrecoverable costs’ and asked why, despite
the risks to shareholders and to insured customers,
Aetna included them as a condition of the Humana
merger deal. Your response did not address a single
one of those questions,” the senators wrote. Aetna
has told HPW that “singling Aetna out may be po-
litically convenient during election season, but this
[Sept. 8] letter ignores realities and takes the focus
away from needed reforms. The ACA is not sustainable without bipartisan action that improves access,
affordability and quality of care for consumers.” Visit
http://tinyurl.com/z94qrup.
u A new report by the Center for American Progress promotes outcomes-based prescription
drug price negotiations. Called “Negotiation Plus:
A Framework for Value-Based Drug Pricing,” the
report outlines a framework to establish a revised
negotiation process for Medicare and commercial insurers by using comparative effectiveness research to
weigh the clinical benefits of two or more treatment
alternatives. Visit http://tinyurl.com/h3wkwq9.
u UnitedHealth Group and the University of California on Sept. 29 said they are starting a new
10-year strategic partnership to help transition
California to a value-based system. “UC Health
and UnitedHealth Group’s Optum and UnitedHealthcare businesses will promote advancements in
clinical research and collectively design patient-centered, clinically integrated care provider networks,
with a goal of transforming the state’s health care
delivery system,” the carrier said. UnitedHealthcare will also donate $1 million to UC Health. Visit
http://tinyurl.com/zrbuccd.
u California Gov. Jerry Brown (D) on Sept. 23
signed into law a bill (AB 72) that bars consumers from receiving large medical bills when they
unknowingly receive care from an out-of-network
provider at an in-network facility. Broker Craig
Gussin, a principal at Auerbach & Gussin Insurance
and Financial Services in San Diego, tells HPW the
bipartisan consumer protection legislation is aimed
at helping to protect consumers from unexpected
balance billing. “Finding a way to end these surprise
medical bills has been a top priority of our association [the California Association of Health Underwriters] for over 15 years. The reason our association
supported AB 72 is that health insurance agents are
usually the first one consumers will call asking for
help to investigate and deal with out-of-network
charges and balance billing issues,” he says. “In California, our association members receive thousands
of calls on balance billing problems each year.” Visit
http://tinyurl.com/z3u5x38. Contact Gussin at
[email protected].
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