Medical Costs

Insurers Are Helping Patients, Providers Deal With Medical Debt

Although fewer Americans are dealing with medical-related financial hardships since the coronavirus pandemic began, the percentage is still high and could rise further as Medicaid redeterminations resume, major Affordable Care Act subsidy expansions expire and inflation eats away at people’s incomes and savings. To that end, payers are implementing ways to ease the burden of high out-of-pocket costs for patients and to help providers improve their collections, even as one expert calls the services a “Band-Aid attempt to cover the widening healthcare affordability gap.”

An Urban Institute report published on May 11 found that 16.8% of adults from 18 to 64 years old had medical debt in April 2021, down from 23.6% in March 2019. The Urban Institute cited several potential reasons for the decline, including a reduction in health care utilization, pandemic relief measures and growth in Medicaid enrollment.

0 Comments

Cigna Eases Investor Fears With Better Medical Cost, Membership

Cigna Corp. pleased Wall Street with its first-quarter 2022 financial results, touting a solid increase in commercial self-funded membership and a better-than-projected medical loss ratio (MLR) of 81.5%.

The insurer posted first-quarter 2022 net income of $1.18 billion ($3.68 per share) on revenue of $44.0 billion, up from net income of $1.16 billion ($3.30 per share) on revenue of $40.1 billion for the same period in 2021.

Cigna’s self-funded commercial membership rose 9% to 12.5 million through March 31, while insured commercial membership rose 2% to 2.2 million. In all, Cigna had 17.8 million medical members on March 31, 2022, up about 700,000 or 4% from Dec. 31, 2021, when it stood at 16.7 million.

0 Comments

Some Insurers May Not Be Ready for Price Transparency Mandates

Insurer price transparency rules are finally starting to come into effect after years of litigation and administrative delays, but it’s not clear whether insurers will be compliant when deadlines arrive. Health care insiders tell AIS Health, a division of MMIT, that larger carriers have an advantage in implementation and smaller insurers may have a more difficult time keeping up.

Federal enforcement of payer price transparency rules by HHS and the departments of Labor and Treasury will begin on July 1 of this year. That deadline, during which plans will need to “make public machine-readable files disclosing in-network rates and out-of-network allowed amounts and billed charges,” per a government document, is the first of many health plan transparency requirements that will come into effect over the next two years.

0 Comments

Telehealth Usage Expands by Over 7,000% During the Pandemic

Driven by the COVID-19 pandemic, telehealth utilization increased 7,060% from 2019 to 2020, while utilization dropped 38% in ambulatory surgery centers, 30% in emergency rooms, 16% in urgent care centers and 4% in retail clinics, according to a new FAIR Health white paper. The FH Medical Price Index tracks the weighted average growth in median procedure charges and median allowed amounts. Among the six procedure categories it studied, hospital evaluation and management saw the largest percent increase in both the charge amount index and allowed amount index.

0 Comments

CMS Finalizes MA Rule Provisions, Delays Pharmacy DIR Change

Just a month shy of the bid deadline for the 2023 plan year, CMS on April 29 finalized most provisions of a sweeping Medicare Advantage and Part D rule that was proposed in January. Those provisions included restoring detailed medical loss ratio (MLR) reporting requirements, requiring MA Special Needs Plans to incorporate certain questions on social risk factors into health risk assessments, and finalizing a pathway to allow for star ratings to reflect a Dual Eligible SNP’s local performance. But one Part D provision regarding pharmacy direct and indirect remuneration (DIR) was notably delayed, allowing plans, pharmacies and pharmacy benefit managers time to renegotiate pharmacy pacts.

“Generally speaking, the rule wasn’t surprising. CMS largely did what they proposed. I think the major concession that plans and PBMs were concerned about was the start date of the pharmacy DIR change, and they had that addressed. But by and large this rule was consistent with CMS’s goals of raising the bar for what it means to be a SNP and for reducing costs at point of sale for seniors” starting in 2024, says Tom Kornfield, senior consultant with Avalere.

Poor Mental Health Care Access Increases Systemic Costs

Health insurers have long struggled to administer behavioral health benefits, which won’t get easier any time soon: Demand for mental health services is high due to the opioid crisis and the mental health strains of the COVID-19 pandemic. Experts from clinical, financial and policy backgrounds say that coordinating behavioral health care with traditional medical benefits — and bringing behavioral health care providers into insurer networks — are both essential to managing costs and ensuring access to care.

Despite decades of policymaking that has attempted to streamline access to mental health care benefits, most notably through mental health parity, mental health care remains expensive and hard to access. (Several federal laws mandate mental health care parity: Health plans are not allowed to impose benefit limitations on mental health care that are more severe than limits placed on medical and surgical benefits.) What’s more, mental health care providers are usually siloed from other clinicians on a patient’s care team, which tends to exacerbate medical conditions and increase costs.

0 Comments

Health Insurers Invest Billions in Affordable Housing Projects

Health care organizations across the country have poured billions into housing investments in recent years: In the past month, Kaiser Permanente and UnitedHealth Group both announced investments of over $100 million in affordable housing projects. Several health plans tell AIS Health that while they do expect a modest return on investment or reduction in costs from their efforts, they mostly see these expenditures as an act of altruism in line with their missions as stewards of public health.

According to the organizations themselves, total capital allocations to affordable housing investments by Kaiser Permanente, UnitedHealth Group and CVS Health Corp. amount to approximately $1.65 billion combined. A large portion of those funds are allocated to finance investments in affordable housing through the Low Income Housing Tax Credit (LIHTC), a financial instrument rolled out by the federal government in the late 1980s and early 1990s to encourage investment by the private sector in affordable housing.

0 Comments

Novartis’ Pluvicto Brings New Option to mCRPC Treatment

A new prostate cancer drug is sparking interest among payers and oncologists alike, according to a survey by Zitter Insights.

On March 23, the FDA approved Novartis Pharmaceuticals Corp.’s Pluvicto (lutetium Lu 177 vipivotide tetraxetan) (formerly referred to as 177Lu-PSMA-617) for the treatment of prostate-specific membrane antigen (PSMA)-positive metastatic castration-resistant prostate cancer (mCRPC) in people who have been treated with androgen receptor pathway inhibition and taxane-based chemotherapy. The product from Novartis unit Advanced Accelerator Applications USA, Inc. is the first FDA-approved targeted radioligand therapy for eligible people with mCRPC that combines a targeting compound with a therapeutic radioisotope.

UnitedHealth Delivers Strong 1Q, Touts MA, Value-Based Growth

Despite variations in care utilization due to COVID-19 that drove up medical costs early in the quarter, UnitedHealth Group reported a strong start to 2022, with financial results exceeding analysts’ expectations driven by outperformance in both the UnitedHealthcare and Optum Health segments. As the company anticipates continued growth in value-based care initiatives and Medicare Advantage enrollment throughout the year, it raised its full-year adjusted earnings-per-share (EPS) outlook by 90 cents to a range of $21.20 to $21.70.

For the three months ending on March 31, the company recorded overall revenues of $80.1 billion, representing a year-over-year increase of 14.2% that reflected double-digit growth at both Optum and UnitedHealthcare. The UnitedHealthcare segment reported $62.6 billion in revenues, up 13.6% from $55.1 billion a year ago, and operating earnings of $3.8 billion, compared with $4.1 billion last year, reflecting the effects of “pandemic-disrupted care patterns,” the company explained in its earnings press release. Revenue for the Medicare & Retirement segment was $29.1 billion, up from nearly $25.5 billion in the first quarter of 2021.

Insurers, Private Equity Firms Are Buying Up Home Care Providers

Health insurers are taking over home health care providers: Most notably, the two largest Medicare Advantage health insurers, UnitedHealth Group and Humana Inc., have each moved to acquire sizable home care providers in the last year. Health care insiders tell AIS Health, a division of MMIT, that home health deals by insurers will become more frequent as plans hope to avoid reimbursing long-term hospital stays by treating members at home — even as private equity firms make inroads into the home health space with an eye toward increasing margins across the industry.

UnitedHealth on March 29 said it plans to spend approximately $6 billion in cash to purchase LHC Group, Inc., a home health care company. In August 2021, Humana completed its acquisition of Kindred at Home, which it has since begun to fold into its CenterWell provider brand. In a recent earnings call, Humana CEO Bruce Broussard said that the carrier is looking for still more home care providers to purchase.

0 Comments