In today’s Wall Street Journal article there is a very good overview of some of the next challenges that have to be worked due to the recently passed PPACA. Specifically what will be required to be considered “essential benefits” in the health law? The legislation gives 10 categories of care that plans must provide for customers of the health-insurance exchanges that are launching in 2014. But the law leaves details up to regulators, who are now starting to develop the rules.
I think this is where we are going to see tremendous debate over the next few weeks. There are certain areas of healthcare we can all agree need to be considered “essential” but there will be tremendous challenges in agreeing on all areas of what should be considered essential benefits. As we all know the more items are added as essential benefits the higher the price tag. What you may consider as essential benefits might not be considered essential benefits by someone else.
Check out the 10 general categories of benefits that the health law considers essential at:
http://online.wsj.com/article/SB10001424052748703905404576164904171231570.html?mod=WSJ_hpp_sections_health
When networks were first created (nearly 25 years ago), you had a select few groups of providers who agreed to a discount, with the notion that giving a discount will drive more business to the provider. Right idea, but where did we go wrong? Fast forward to today and nearly every provider is in a network; so are you really getting a discount? In fact, somewhere between 2% to 8% of claims occur outside of PPO network. A very small number.
So between 92 - 98% of the population are in a PPO accessing a network where there is a “contract” between the provider who agrees to perform services at an agreed-upon rate. For those who seek care within the “network” of providers, a member supposedly gets a discount off a billed charge and no balanced billing is to occur. That has been the “mantra” for years. Go to the network of providers, get a discount and no balanced billing. If you go outside the “network” you pay a higher portion of the fee and deal with potential balance billing issues.
Cost containment organizations like NCN have worked with providers in the out-of-network setting: clients want some rate reduction for out-of-network claims and don’t want to pay retail. However, the moment you work on out-of-network claims, clients have a “deep concern” about the patient not being balanced billed.
I can understand the need to work in partnership with the provider and patient to create a resolution that provides a rational payment for the provider. However, when the focus is placed squarely on the issue of “balance billing” in the out-of-network setting, clients assume that balance billing does not occur in the in-network setting when in fact, balance billing could possibly be bigger issue for in-network claims. As provider incomes continue to be cut due network agreements, government cuts, etc, balance billing may be a bigger problem for in-network claims than out-of-network claims.
An article published in BusinessWeek in 2008 highlighted a growing issue with balance billing occurring with providers who had network agreements but were balance billing anyway. I realize this can occur accidentally. Providers have so many different networks they work with that it is hard for them even to know what is to be reimbursed. Add this to the fact most hire outside billing/collection agencies to handle their business and you have another layer of potential miscommunication. All said, it is important for all of us to realize that balance billing is not an exclusive issue for out-of-network claims. It is occurring in the in-network environment.
Members should be given tools, such as data and support, to negotiate with providers for a satisfactory solution. NCN published an article, Negotiating a Balance Billing Solution, that a member recently used to save more than $1000 on a balance bill for ambulance services. Download it here.
Last Friday, Aetna released their earnings report and as expected had an increase in profit. When you read the news release you will see a common theme in theirs that you also see in UnitedHealth, Cigna and WellPoint: more and more members are delaying to seek care. As the economy is struggling to regain stability, and those covered under insurance today have very high deductibles and coinsurance, people will delay seeking treatment for services.
In some ways having people delay going to the doctor and asking the question, “do I really need to seek care?” is a good thing. Why may you ask? Many years ago we introduced the very low copay option to insureds. We did this as an incentive to go to a PPO/HMO provider as an incentive to try this “new” concept out. What we created were people going to the doctor with the slightest sniffle or ache. The cost was minimal; why wouldn’t you?
Fast forward to where we are today. Those covered by insurance with high deductibles are now saying “maybe I’ll feel better tomorrow,” or “let me look online to see if I really need to see a doctor.” This is a culture shift from when we had low copays, no claim forms and unlimited access. Today, the consumer is thinking with their pocketbook. Again, people should seek care that they need, it but it is interesting to see how the culture shift is being played out in the financial numbers with the carriers.
No doubt they will have to adjust their assumptions, but stay tuned. I guess my mom was right, “unless you are bleeding and pass out, there is no reason to go into town to see a doctor.” (I lived on a farm in Nebraska)
Listed below is the highlight of Aetna’s earnings news release:
“Aetna said the profit boost was "largely the result of higher commercial underwriting margins driven by management actions to appropriately price the business," along with lower health care use. Aetna had struggled through 2009 with medical costs that climbed higher than the company expected when it set prices for that year. Company leaders said then that they repriced a significant portion of Aetna's commercial insurance business.
Aetna is the third largest commercial health insurer based on enrollment, trailing WellPoint and UnitedHealth. Those insurers and Cigna Corp. have all seen a slowdown in health care use over the last part of 2010.
Industry observers have said use slowed due to a mild flu season that followed the swine flu outbreak of 2009 and because consumers tend to cut back on care during a struggling or recovering economy.”