Employer Group Health Plans

It is getting harder and harder for health care providers to get claims approved and get paid on time by commercial health insurance plans, according to a new report from Crowe, a company that provides revenue cycle intelligence for providers. One of the report’s authors says that it’s difficult to parse what exactly is driving the trend, but she pointed out that Crowe’s data indicates many initially denied claims eventually get resolved — suggesting insurers are aiming to “hold on to the money a little bit longer.”

Commercial payers reimburse providers at higher rates than Medicare or Medicaid, which usually leads organizations to prefer a payer mix that skews more toward the privately insured, the Crowe report noted. Yet that comes with a downside: The firm found that compared to government payers, private insurers “take the longest to pay, require providers to jump through more administrative hoops to get paid,” such as prior authorization, and “delay payments to providers via claim denials at a higher frequency.”

Challenges with finding transportation is keeping many U.S. adults from accessing necessary health services, according to a recent report from the Urban Institute. Health policy experts tell AIS Health, a division of MMIT, that providing non-emergency medical transportation (NEMT) can benefit payers by enabling people to make their routine appointments and adhere to medications, which lowers the risk of high-cost hospitalizations.

However, they say that while Medicaid requires NEMT and Medicare Advantage plans are increasingly offering the benefit, NEMT remains uncommon in the commercial, employer-sponsored insurance sector.

Even when NEMT is available, its usage remains low. For instance, a study released earlier this year from the Medical Transportation Access Coalition (MTAC) found that only 4.6% of Medicaid and Children’s Health Insurance Program beneficiaries used NEMT in 2019. The MTAC, which was formed by three leading NEMT brokers and is managed by Faegre Drinker Consulting, analyzed data from 66 million people enrolled in 32 states and Washington, D.C.

Racial disparities in health care have become a top policy priority since the start of the COIVID-19 pandemic, which disproportionately killed people of color, particularly Black and Native American people. The Biden administration made closing racial health gaps a key part of its pandemic response — and health insurance-related policy changes going forward. One new report from the CMS Center for Medicare & Medicaid Innovation (CMMI, or the Innovation Center) says that the administration has made “meaningful progress” in closing racial disparities, and a review of health insurer equity efforts from the New York United Hospital Fund (UHF) says that “many…carriers have made substantial commitments to the communities they do business in,” but both conclude that insurers and policymakers must do far more to eliminate racial health gaps.

As more employers shifted to self-funded health plans, the stop-loss insurance segment expanded to $26 billion in 2021, with a growth rate exceeding 10% in each of the past five years, according to an A.M. Best report. There has been a notable uptick in employers with fewer than 1,000 employees choosing stop-loss insurance since 2018. Although the medical loss ratio for stop-loss has been lower than for group commercial coverage over recent years, it rose from 81.5% in 2020 to 85.0% in 2021, largely due to a year-over-year increase in stop-loss claims from major insurers and several other insurers that had claims for the first time in 2021.

After the Trump administration loosened the regulations governing association health plans — and ignited a court battle that ultimately blocked the new rules — AHPs and their close cousin, multiple employer welfare arrangements (MEWAs), have largely faded from the headlines. However, a recent announcement from the Dept. of Labor (DOL) regarding a MEWA that failed to pay $54 million in health claims shows that the fraud and insolvency issues that have long plagued such plans haven’t gone away.

“My sense is that there are what we call self-funded MEWAs out there that may be kind of operating under the regulatory radar,” says Sabrina Corlette, co-director of Georgetown University’s Center on Health Insurance Reforms (CHIR).

Although executives during The Cigna Group’s first-quarter 2023 earnings call put a heavy emphasis on the firm’s evolving PBM business model, Cigna’s ability to control health care costs was a noteworthy —albeit less headline-grabbing — highlight that caught one equities analyst’s eye.

Cigna delivered “the best MLR beat of the bunch,” Jefferies analyst David Windley wrote in a May 8 research note, pointing out that the insurer’s medical loss ratio of 81.3% beat the Wall Street consensus estimate by 60 basis points. For the full year 2023, Cigna expects its MLR to be in the range of 81.5% to 82.3%.

Blue Cross Blue Shield of Michigan and Blue Cross and Blue Shield of Vermont, the largest health insurers in their respective states, have struck an agreement that will see the Vermont Blues plan become a subsidiary of BCBS of Michigan. The nonprofit companies said in a May 1 news release that this deal “is an affiliation, not an acquisition, which means there is no financial exchange between the organizations.”

The plans’ boards of directors have approved the agreement, which still needs to be approved by state regulators. A BCBS of Michigan spokesperson tells AIS Health that the regulatory process “will take several months to complete.” If the deal closes, the insurers will share technology platforms and other service offerings, among other collaborations.

Although UnitedHealth Group’s executives touted “strong and well-balanced” growth in the first quarter of 2023, the company’s stock dropped following its April 14 earnings report. Equities analysts suggested that a decline in the days claims payable (DCP) metric led to the sell-off, as well as concerns about Medicare Advantage-related business risks — but their views differ about how concerned investors should be.

SVB Securities analyst Whit Mayo, for example, suggested in an April 17 research note that the risks to UnitedHealth’s valuation are overblown.

The company’s first-quarter results “brought forth continued themes of consistency, strong MA and self-funded growth, along with noticeable top-line strength within Optum Health,” Mayo wrote. “Noise around trend, lower DCP, 2024 MA risk balanced against the recent run-up, and a historically high relative valuation premium presumably pushed shares lower on Friday,” he suggested, but added that “1Q results generally and historically present few new details to reshape investors’ views on the full-year earnings curve for the sector.”

While there are signs that ultra-high inflation rates are retreating, health care cost pressures are likely to stick around for some time and have a major impact on payers, industry experts say.

The Bureau of Labor Statistics (BLS) reported on April 12 that the consumer price index (CPI) rose by 5% in March from a year earlier, the smallest increase since May 2021 and the ninth consecutive month that annual inflation has declined. Meanwhile, the CPI for medical care services increased by just 1% year-over-year, including a 0.5% increase in physicians’ services and a 2.7% increase in hospital services.

After much delay, the City of New York appears to be moving forward with a plan to transition its retiree health care coverage to a group Medicare Advantage plan, having recently chosen CVS Health Corp.’s Aetna to administer a PPO plan starting Sept. 1. The contract is valued at $15 billion over the first five years and four months of the term agreement.

The city’s plan to transition some 250,000 retirees and their eligible dependents away from fee-for-service (FFS) Medicare coverage was initially supposed to begin on April 1, 2022, and be managed by Elevance Health, Inc. (in partnership with EmblemHealth). Retirees petitioned to block the move, and state Supreme Court Judge Lyle Frank in March 2022 ruled that the proposal violated city law by requiring retirees who opted out of the switch to pay $191 per month to maintain their FFS coverage. That July, Elevance backed out of the deal.