Health Plan Weekly

On the heels of announcing that private health insurers will soon have to reimburse Americans for at-home COVID-19 tests, President Joe Biden said on Dec. 21 that the federal government will also distribute a half-billion free at-home tests. During the president’s remarks, which come as case counts are rising due to the omicron variant, he acknowledged that “we need to do better with at-home testing,” adding that the administration will set up “websites where you can get them delivered to your home.” Biden also said the federal government will set up emergency testing sites in areas that need additional testing capacity, starting with sites in New York City.

The American Medical Association (AMA) and the American Hospital Association (AHA), the largest provider trade groups in the country, sued the Biden administration over regulations HHS issued in implementing the No Surprises Act. In a lawsuit filed Dec. 9 in the U.S. District Court for the District of Columbia, the AMA and AHA request injunctive relief of the latest interim final rule implementing the No Surprises Act. The Biden administration’s most recent rule aimed at implementing the surprise billing ban, which comes into effect on Jan. 1, 2022, has come under fire from provider groups — and members of Congress, many of them physicians — for “plac[ing] a heavy thumb on the scale of an independent dispute-resolution process that would unfairly benefit insurance companies,” in the words of an AMA press release.

So far during the 2022 open enrollment period for Affordable Care Act marketplace plans, approximately 3 million people have selected plans on HealthCare.gov. That running total includes 560,000 who selected plans during week four of open enrollment, according to CMS’s weekly enrollment snapshot.

HHS Sec. Xavier Becerra is defending No Surprises Act-related regulations from growing criticism by providers and members of Congress, citing an HHS report on the cost and prevalence of surprise bills. Becerra said on Nov. 22 that providers who overcharge for services will simply have to change: “I don’t think when someone is overcharging, that it’s going to hurt the overcharger to now have to [accept] a fair price,” he told Kaiser Health News. “Those who are overcharging either have to tighten their belt and do it better, or they don’t last in the business. It’s not fair to say that we have to let someone gouge us in order for them to be in business.” The HHS report found that “surprise medical bills are relatively common among privately insured patients and can average more than $1,200 for services provided by anesthesiologists, $2,600 for surgical assistants, and $750 for childbirth-related care.” More than 150 members of Congress from both parties, many of them physicians, sent a letter to Becerra earlier this month protesting the latest rulemaking on the No Surprises Act. In addition, Texas’ largest provider organization filed suit to block the latest interim final rule.

Cigna Corp. on Nov. 4 reported a higher-than-expected medical loss ratio (MLR) for the third quarter of 2021, which the company blamed on rising medical costs from COVID-19 care and from high utilization among customers who signed up for Affordable Care Act exchange plans during the pandemic special enrollment period. However, equities analysts were not overly concerned, noting that most investors saw the “MLR miss” coming and that Cigna did beat Wall Street consensus estimates for its quarterly earnings.

Only a small number of physician specialties paid commercial health insurance plans over 150% more than Medicare payment rates for healthcare services, according to a recent Urban Institute study based on data from FAIR Health’s private health insurance claims database from March 2019 to February 2020. Anesthesia received the highest markup, at 330% of Medicare rates. Meanwhile, many specialties, such as cardiology, cardiovascular surgery, general surgery and orthopedics, received modest commercial payment rates that were 130% to 150% above Medicare rates.

Humana Inc.’s earnings for the third quarter beat Wall Street projections, but the firm lowered its end-of-year guidance, citing COVID-19 costs. The Medicare Advantage-focused payer’s executives also said it would sell off much of its hospice operations, touted the firm’s acquisitions in home care and said they are actively looking for more home health and primary care providers to purchase.

CVS Health Corp. beat earnings projections for the third quarter, with PBM subsidiary Caremark a main driver of profitability. Aetna, the firm’s health insurance subsidiary, was also profitable, but its results disappointed Wall Street analysts. CVS executives also doubled down on the firm’s growing primary care strategy and indicated they may seek transactions in that space.

✦ Politan Capital Management LP, a new hedge fund led by longtime activist investor Quentin Koffey, plans to use its $900 million stake in Centene Corp. to replace several of the carrier’s board members, the Wall Street Journal reported on Nov. 3. Politan hopes to increase margins at the insurer, which have been lower than those at other large carriers. According to the Journal, Politan wants to put former WellCare CEO Kenneth Burdick and former Anthem, Inc. Chief Financial Officer Wayne DeVeydt on Centene’s board.

When the annual open enrollment period for Affordable Care Act exchange plans kicks off on Nov. 1, consumers will be shopping in a market that is experiencing a surge of insurer competition and consequently, a dizzying array of plan choices.

“The number of plans that people are seeing is increasing dramatically,” David Anderson tells AIS Health, a division of MMIT. Anderson is a research associate at the Duke-Margolis Center for Health Policy who studies the ACA marketplaces.