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CMS Releases FAQs On Transparency And Quality Rating Guidelines

On August 3, CMS released at its REGTAP.info website (registration required), a series of frequently asked questions (FAQs), most of which provide additional detail on the transparency and quality rating guidelines released on July 25, 2016. The FAQs clarify that only qualified health plan insurers in consumer display pilot states (Michigan, Ohio, Oregon, Pennsylvania, Virginia, and Wisconsin) and in states with state-based marketplaces that display star ratings can use their star ratings in marketing materials. CMS will issue disclaimer language for insurers to use that will caution consumers that the display of the star-rating system is still being consumer tested.

The FAQs also clarify a point about the claims and appeals data that QHP and standalone dental plan insurers must submit under the transparency initiative in federally facilitated marketplace states and in state-based marketplace states that use the FFM enrollment platform: these data are for claims and appeals for services provided in 2015, not for services provided earlier for which a claim was processed in 2015. Insurers that are new to the marketplace for 2017 must complete the transparency template, including URLs for claims payment and other policies, but do not have to submit data since they would not have 2015 data. Initial transparency information must be submitted to September 2, 2016 and final data by September 23.

Read the full article here.

According to Aetna We Have Two Kinds of Insurance Companies Under Obamacare: The “Less Worse Off” and the “Worse Worse Off”

Surviving Co-Ops Sue Feds Over Inadequate Obamacare Reinsurance Payments While Aetna Complains the Payments Aren’t Enough For Their Only “Less Worse Off” Financial Results

I don’t know if you noticed the recent juxtaposition between the surviving co-ops complaint that they shouldn’t have to pay the big legacy carriers money under the Obamacare “3Rs” reinsurance scheme with Aetna’s complaint this week that these same payments aren’t enough for them to be confident they will continue in the exchanges.

Of the original 23 insurance co-ops created under the Affordable Care Act, only seven remain.

And, those seven are having a tough time of it. So tough that at least three are suing the federal government over the way the “3Rs” reinsurance scheme works. The are complaining that the risk adjustment provisions of the law unfairly favor the big legacy health plans such as the big publicly traded plans, like Aetna, and the big market share Blue Cross plans.

So, now the co-ops complaint is that they’d be doing fine if it weren’t for the Obama administration’s flawed risk adjustment program designed to move money from the plans with the healthiest customers to those with the sickest.

The irony that the risk adjustment system is telling us that these co-ops have the healthiest consumers and are still going broke should not be lost.

Meantime, one of the legacy carriers, that has been benefiting from these payments, Aetna, is threatening to pull out of the exchanges because of their big 2016 Obamacare losses and is blaming part of it on the failure of the same risk adjustment system to adequately reimburse them for their losses!

Read the full article here.

Frustration Mounts Over ObamaCare Co-Op Failures

A new wave of failures among ObamaCare’s nonprofit health insurers is disrupting coverage for thousands of enrollees and raising questions about whether regulators could have acted earlier to head off some of the problems.

Four ObamaCare co-ops have failed due to financial problems since the beginning of the year, the latest trouble for the struggling program.

The co-ops were set up under ObamaCare to increase competition with established insurers, but just seven of the original 23 co-ops now remain.

The latest round of failures poses an even thornier problem than earlier cases because enrollees’ coverage is now being disrupted in the middle of the year. That can increase patients’ out of pocket costs and make it harder to keep the same doctors.

In Illinois, Oregon and Ohio, a combined total of about 92,000 people were being forced to find a new plan. A co-op in a fourth state, Connecticut, will last until the end of the year.

The Obama administration acknowledges there are extra problems when a co-op shuts down in the middle of the year. At a Senate hearing in March, Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services (CMS), admitted that a co-op in Nebraska, called CoOportunity, should have been shut down before it entered 2015. The co-op ended up failing shortly into the year.

“I will say CoOportunity should never have been allowed to go into the 2015 year, either by the co-op or by ourselves, and I think that’s a very fair criticism in looking back,” Slavitt said then.

Now there’s a similar situation in three other states. Asked if the CMS acknowledges that regulators should have shut the co-ops down sooner, CMS spokesman Aaron Albright instead pointed to state regulators, noting they have primary oversight responsibility.

Read the full article here.

How Data Brokers Make Money Off Your Medical Records

For decades researchers have run longitudinal studies to gain new insights into health and illness. By regularly recording information about the same individuals’ medical history and care over many years, they have, for example, shown that lead from peeling paint damages children’s brains and bodies and have demonstrated that high blood pressure and cholesterol levels contribute to heart disease and stroke. To this day, some of the original (and now at least 95-year-old) participants in the famous Framingham Heart Study, which began in 1948, still provide health information to study investigators.

Health researchers are not the only ones, however, who collect and analyze medical data over long periods. A growing number of companies specialize in gathering longitudinal information from hundreds of millions of hospitals’ and doctors’ records, as well as from prescription and insurance claims and laboratory tests. Pooling all these data turns them into a valuable commodity. Other businesses are willing to pay for the insights that they can glean from such collections to guide their investments in the pharmaceutical industry, for example, or more precisely tailor an advertising campaign promoting a new drug.

By law, the identities of everyone found in these commercial databases are supposed to be kept secret. Indeed, the organizations that sell medical information to data-mining companies strip their records of Social Security numbers, names and detailed addresses to protect people’s privacy. But the data brokers also add unique numbers to the records they collect that allow them to match disparate pieces of information to the same individual—even if they do not know that person’s name. This matching of information makes the overall collection more valuable, but as data-mining technology becomes ubiquitous, it also makes it easier to learn a previously anonymous individual’s identity.

Read the full article here.

Obamacare’s 2017 California Rates to Increase an Average of 13% With the Biggest Players Going Up 17.2% and 19.9%

After last year’s 4% rate increase, California’s Obamacare insurance exchange rates appear to be catching up to the rest of the country.

The two biggest carriers are raising rates by much more than the average 13.2% increase. Blue Shield said its average increase was 19.9% and Anthem said it would increase rates an average of 17.2%

According to the LA Times, Covered California officials blamed the big increase on the “rising costs of medical care, including specialty drugs, and the end of the mechanism that held down rates for the first three years of Obamacare.”

Well, once again when it comes to Covered California’s explanations, not exactly.

On the argument blaming the rising cost of care, in late May Milliman published its Milliman Medical Index indicating that baseline medical cost trend was up 4.7% year-over-year––the lowest annual increase since Milliman first measured cost trend in 2001. And, of course, this 4.7% increase included the cost of specialty drug costs.

On the argument blaming the mechanism that held down rates the first three years coming to an end, what Covered California didn’t mention was that the Congress also suspended the health insurance tax under Obamacare for 2017––an action that about offset the end of the reinsurance program for insurers.

California did have a much lower Obamacare rate increase last year when compared to many other parts of the country. But one of the things I have learned over the years is that it is not uncommon for one insurance company or one market to see better claims experience than others only to have it all come back to average in due course.

Read the full article here.