Author: Ann Marie Marciarille

Hospitals v. Insurers: Mississippi Version

Ann Marie Marciarille1 Comment

I love the movie Cowboys & Aliens for its retro edge.  The story is ever the same, though the players may be altered slightly.

And so it is with the epic battles between hospitals and insurers over network participation and rates. I tell my students these battles are among the hardest fought and most continuous in all of health care contracting, whether or not what is going on behind the scenes is glimpsed by the public.

Occasional public glimpses over the bare-knuckled negotiations between hospitals and insurers occur when the negotiations threaten to blow up and plan enrollees are informed of impending changes to hospital "in-network" provider status. The issue can become quite heated.  People develop considerable loyalties to specific in-patient facilities, loyalties cultivated between and among friends and acquaintances (giving a whole new meaning to the idea of hospital "network"). You can read about a thought experiment probing patient acute care hospital selection here: http://www.psychologytoday.com/blog/the-doctor-is-listening/201308/how-do-you-choose-hospital.  It may come as little surprise, then, to see Connecticut's Stamford Hospital, apparently trying to harness patient loyalty in opposition to the breakdown of their negotiations with Blue Cross & Blue Shield here:  http://www.stamfordhealthintegratedpractices.com/About-SHIP/News.aspx.

What is going on in Mississippi takes one of these same kinds of disputes and writes it large. Negotiations have apparently broken down between the Blue Cross Blue Shield Network and Hospital Management Associates for-profit hospital chain over the in-network or out-of-network status of ten HMA facilities. After BCBS dropped these hospitals from their network, Governor Phil Bryant issued an executive order temporarily (for a maximum of 60 days) reinstating these ten HMA facilities into the BCBS network on contract terms based on the old contract rates. Yes, the facilities appear to have been commandeered and hospital-insurer contract rates have been set by the Governor.

Of course, this is already in federal district court.  Whether the Mississippi Patient Protection Act of 1995 requirement that insurers provide "reasonable access to care with minimum inconvenience" means that BCBS cannot walk away from what it says is a losing deal remains to be seen.  The real back story is that BCBS holds a near monpoly in some of  Mississippi's health insurance markets. You can see 2010 data on health insurance market concentration (looking at the individual insurance market) here: http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8242.pdf  And at least three of the hospitals are sole acute care providers in their rural settings, deeply dependent on reimbursement from BCBS.

This Mississippi story tells a tale of health insurance market concentration.  And it tells a story of the stark vulnerability of rural hospitals who need all the reimbursement they can get.  "Narrow networks" may be the topic of the month, when discussing cost-containment measures in the ACA but the possibility of non-existent rural networks has been out there for some time because of the high incidence of uninsurance in rural populations.

Governor Bryant is a well-spoken opponent of Medicaid expansion in Mississippi. In January he told a reporter, "I would rather pay extra to Blue Cross [to help cover uncompensated costs for the uninsured], rather than have to raise taxes to pay for additional Medicaid recipients." (You can read the text of that interview here:  http://www.kaiserhealthnews.org/stories/2013/january/23/mississippi-gov-bryant-medicaid-interview.aspx).

It is beginning to look as if he may get his chance.

Hospital Admissions Mayhem

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For some time, courts have been weighing in on HHS's decision to tie a Medicare beneficiary's hospital admission status to their formal hospital admission.  Formal hospital admission usually requires a written order of admission by a physician with the authority to do so and that written order is subject to retroactive audit by Medicare.  This all seems pretty straightforward. Now enter the concepts of "observation status" and revokable admissions and it all gets more complicated.

I have been marveling over the recent opinion of a federal district court in Connecticut  in Bagnall v. Sebelius (3:11-cv-0173-MPS).  Here we see the first principle — allowing the Secretary discretion to define "inpatient" for Medicare purposes — come up against the increasingly common use of observation status, either anticipatorily or retrospectively.

Let me be clear: it is possible for a Medicare beneficiary to be admitted to an acute care hospital, treated as an admitted patient in an acute care hospital for several days, discharged from that acute care hospital to a rehab facility (having met Medicare Part A's  requirement that such a discharge follow a three day acute care hospitalization to achieve maximum coverage) only to be advised  as much as two weeks later that they were in fact not admitted and that their hospital admission was revoked, leaving them with coverage only under less generous Medicare Part B with co-pays and deductibles for that now identified as  out-patient hospital care and for the rehab admission under Medicare Part B that may amount to thousands of dollars.

Now, when commercial health insurance companies make their nut by retroactively rescinding eligibility for health insurance we get so worked up about it that nothing less than the ACA itself tries to take this practice on by clarifying and narrowing the standard for retroactive rescissions.   From the perspective of the Medicare beneficiary, these retroactive determinations of non-admission are very similar indeed and the practice grows ever yet more common.

I understand very well the push and shove between Medicare and acute care hospitals over unwarranted admissions and the particular skepticism that attaches to one night admissions. But when we have put Medicare beneficiaries who, in good faith reliance, have acted on a hospital "admission" in the middle of this dispute, I am at a loss to know who we think we are hurting and who we think we are helping.

Disclosure is the default option of policy makers lacking the will to make a difference.  What might a Medicare patient's admission form now say:

Sign below to indicate you understand you are being admitted to Pleasantview Hospital, unless of course you aren't — something you can only know for certain several weeks from now, and that you accept full responsibility for all charges not covered by your insurer, unless of course they are not — something you can only know for certain several weeks from now….

In one of my favorite teaching cases from health law, a Georgia hospital argued that an incomprehensible liability clause was rendered enforceable by the addition of bold type to its presentation, so let's not omit the clarity bold type would surely add to the above clause.

Competition in the Exchanges

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Peter Gosselin has an interesting post on exchange competition you can read here: http://about.bgov.com/2013-10-08/exchange-competition-cuts-health-insurance-costs-bgov-insight/.  In it, he looks for some kind of connection between larger numbers of insurers operating in a federally facilitiated health insurance exchange and lower anticipated premiums.  His focus is on rating areas with ten or more participating insurers, showing a 31 percent to 35 percent lower rate than those for the same policies in areas with only one issuer.

Now, some of this is old hat. There has been concern for some time that the ACA might simultaneously increase competition in markets that already have robust insurance market competition while simultaneously solidifying the virtual health insurance monopolies in some states.  You can read an excellent two-part Kaiser Health News series on this here:  http://www.kaiserhealthnews.org/stories/2013/april/23/stateline-lack-of-competition-hamper-health-exchanges.aspx

From this perspective, the remarkable thing would be to observe exchange-generated or exchange-enhanced health insurance market competition in states like Alaska, North Dakota, and Alabama.

Still, this is well done, so insightful that I have to wonder if it will be picked up by the general press where the focus tends not to be on the whole point of the ACA: to improve access while lowering costs and improving quality. Whatever the ACA's faults — and they are many — it deserves to be measured against its own goals. 

All in a New York Minute

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Perhaps you are also struck by the irony of shutting down the federal government, in part, in an effort to derail the Affordable Care Act just at the time that the cannot-be-derailed opening of the ACA's health insurance exchanges is occurring.  That said, pretending the exchange openings are derailed may be an interesting strategy. Perception is everything, or so they say.

In light of that, I take an interest in very early reports that New York's Exchange has crashed — overwhelmed by demand. Now, it is an open secret that CMS has been, sotto voce, advising advocacy groups to steer eager exchange enrollees away from all trying to access the system the minute it opens. Of course, the system was not designed for everyone to crowd in at once. Seen from one perspective, this is a failure of communication.

Seen from another, we have a little evidence that New Yorkers know a good deal when they see it and that scarcity can produce extreme reactions in the face of plenty (as scholars of obesity and public health can tell you at length).  

Why the rush of the New York crowd to enroll in a New York minute?

First, New York has done extensive public outreach and education to publicize the exchanges, although counter-detailing has also been prominent. The press has also been vocal. You can see the Daily News' "how to" enrollment guide here: http://www.nydailynews.com/life-style/health/guide-obamacare-affordable-care-act-open-oct-1-article-1.1471102  And you can see the Heritage Foundation's Manahattan counter-advertising here:  http://www.chicagotribune.com/news/columnists/ct-reu-usa–jpg-20130920,0,1248662.photo.  Still, on the principle that all advertising is good advertising, anything that raises the profile of the ACA may serve, in part, to drive traffic to the New York exchange, though I am pretty certain whoever rationalized the cost of a billboard buy on 42nd street for counter-advertising had a different analysis.

Second, it is worth considering whether certain characteristics of the New York exchange have made it particularly attention-grabbing. To understand this, you need to know that for decades New York has had some of the highest individual market premiums.  (Indeed, to understand much of the ACA, it is useful to understand the status quo ante of health insurance in the United States.) This is because, since 1993, New York has had a mandate for guaranteed issue without an individual mandate.  A second important fact is that New York State requires full community rating, which means everyone buying the plan pays the same premium, regardless of age. This state option  is quite unusual.

So, who is crashing the system in New  York?  My guess is that refugees from the individual market — particularly older refugees from the individual market. They have much to gain from New York exchange pricing under the individual mandate.

If I am even remotely correct,  older New Yorkers under the age of 65  ( "non-elderly" to use insurance lingo where everyone over 65 is elderly) who have experienced scarcity by being priced out of the individual market are disproportionately  crowding forward today. Now, the system needs younger enrollees to balance them out.

It is, in short, significant that the system may have crashed under the weight of the long-excluded seeking to enter the system but it is the full scope of enrollment (through March of 2014) that will tell us if all New Yorkers are onboard.  This effort to achieve public buy-in is, from this perspective, a distance event and not a sprint.

Missouri House Committee Moves Forward on Medicaid Expansion

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The Columbia Missourian tells us that the House Interim Committee on Medicaid Transformation decided to begin drafting a Missouri Medicaid expansion proposal this week.  The article is unclear on what exactly a waiver would look like that could "give the state access to federal funds on its own terms." But I can't fault The Columbia Missourian for being unclear on the limits of state discretion under a waiver, because it isn't clear to anyone yet.  All of the study models for the Missouri Committee (Iowa, Indiana, and Arkansas) are still in a state of flux.

And isn't that the real question: how far will HHS bend to entice buy-in now that it may not be coerced? How far will the Medicaid statute itself as well as the ACA allow HHS to bend?

In the meantime, Paul Rand's election year proposal to block grant Medicaid is also apparently under study in Missouri.  Other states have used the 1115 waiver process to substantially block grant Medicaid (think Rhode Island) but that is a negotiated process — just as, I suspect, the ACA Medicaid expansion waiver process will be. 

The Private Option for Medicaid Expansion

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I appreciate that the Missouri version of Arkansas-style Medicaid Expansion is being circulated without name as "Rough Draft No. One."  The shoe fits.  As far as I can tell, the proposal mimics in essentials Arakansas' 1115 waiver application.  You can see that here:  http://humanservices.arkansas.gov/dms/Documents/Final%201115%20Waiver%20Materials%20for%20Submission.pdf and, whatever you think of it, it is no rough draft.  Its drafters have given considerable  thought to "leveraging the efficiencies of the private market to improve continuity, access, and quality for Private Option beneficiaries."  

I think the "rationale" section of the Arkansas 1115 waiver application is the most interesting. "Arkansas Medicaid provides rates of reimbursement lower than Medicare or commercial payers, causing some providers to forego participation in the program and others to "cross subsidize" their Medicaid patients by charging more to private insurers. The Demonstration will rationalize provider reimbursement across payers, expanding provider access and eliminating the need for providers to cross-subsidize."

Now, that's a pretty tall order because cross-subsidization and perverse cross-subsidization is at least as present between and among commercial insurance products as between government funded health insurance and commercial insurance.  It is also an interesting take on the problem of low Medicaid participant provider reimbursement rates in Arkansas.  After all, states establish their own Medicaid provider payment rates within federal requirements and Arkansas has not chosen to be at the top of the permissible range.  "Indeed, there are 23 states with higher Medicaid reimbursement rates (relative to Medicare's)" (Avik Roy in Forbes on March of 2013).

What is the message: we need the commercial insurance market to save Medicaid from ourselves?

Variance in Insurance Rates for Products Sold Through the Exchanges

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Comparing the newly announced insurance rates between and even within states is difficult. Comparing the status quo ante with exchange rates fails to account for the richer health insurance benefits found in the ACA created health insurance exchanges. Comparing an urban state with a rural state fails to account for higher labor and overhead costs in the urban setting and the price effects of precious little health insurer competition in rural settings.

But I am intrigued by an article that examines the spread within a state or a major region, comparing the prices of higher cost (richer) health plans sold through the exchanges with more modest health plans (thinner) sold through the same exchanges. You can see a great article here:  http://healthaffairs.org/blog/2013/08/07/premium-rate-variation-in-exchanges-is-an-eye-opener/

Why does this matter?  It gives us a useful snapshot of how the structure of the exchanges has influenced beginning rates. It probably is too soon to tell if choosing to have an active purchaser exchange model is really what drives the relatively small spread between plan levels in California but time will tell, especially when we consider that (at least as of June 1, 2013) several other states had also chosen the active purchaser exchange model.

The federally facilitated exchanges (FFEs) are, of course, clearinghouse-style, offering none of the rate reduction that may flow from the state using its exchange organizing power to drive health insurance rates for products sold within it to lower levels by requiring a kind of bidding process for the privilege of selling within the exchange.

When I look at the prices of exchange purchased health insurance in the California exchange, I have to wonder if — when all is said and done — it may end up being more expensive to purchase through Missouri's FFE than to purchase through California's state-sponsored health insurance exchange.

Finding the Uninsured

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We all know people who lack health insurance. We just may not know that they lack health insurance. They know.

Of course, some people's need is obvious — they put it forward in disease groups or through pharmaceutical assistance programs. But the quietly uninsured, they have been in a kind of "don't ask, don't tell" place for some time. If we had asked regularly and recorded their responses and then thought about aggregating the data, we might have had to do something programmatic with what we knew.

Our deeply unprogrammatic safety net patch work for the uninsured comes back to haunt us now. How to find the uninsured, now that we (more so in some states, less so in others) want to do something programmatic?  Here's a fascinating article about how the state of Maryland is looking for tracings of uninsurance in things like emergency department overuse: http://www.baltimoresun.com/health/health-care/bs-hs-health-care-uninsured-20130907,0,2157047.story.    Of course, those tracings are also somewhat  consistent with under-insurance. It ought to be interesting to see — now that we officially care to know — how we sort the two out.

Am I My Patient’s Keeper?

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I gave a presentation last night to a group of HIV/AIDS pharmacists who have been considering issues at the intersection of patient-pharmacist relationship and public health law.  Pharmacists involved in the care of persons who are HIV positive often are part of a health care team (doctor, nurse, social worker, case manager, pastoral care).  The work is highly specialized and often involves working exclusively with an HIV positive population.  These folks see a lot.

Most of their questions circled around the tension between their obligations to their group's patients and their larger ethical obligations to others (think sexual partners and needle sharers) who may be at undisclosed risk in these relationships.  Missouri law is convoluted, essentially permitting but not requiring non-consensual disclosure of HIV positive status and risk to a spouse or sexual partner. We compare this with New York's relatively new public law requiring such disclosure and the conversation took off from there.

They were a good group. They struggled with the need and desire to build an alliance with their group's patients and their sense that a single-minded focus on only the non-disclosing individual might leave others at risk.

Criminalization of non-disclosed status of HIV conduct was also discussed. Missouri goes one step further and crimnalizes the failure to disclose HIV positive status to a sexual partner. Some of the parmacists were easy with inviting the state in to police the sexual encounter. Others seemed to think that these statutory provisions would drive us further away from a culture of HIV testing, treatment, and even disclosure.

It has been said that we can either criminalize HIV positive status or lower its incidence, but not both.